New residential land tax is 'sledgehammer to crack a nut'

The New Residential Zoned Land Tax (RZLT) which will be introduced in early 2024 and replace the Vacant Site Levy was raised at council level by Cllr Enda McGloin. 

The Residential Zoned Land Tax is a new tax which the Government says is aimed at increasing housing supply by activating lands zoned for residential development for housing. It also aims to incentivise landowners to use existing planning permissions for housing.

It’s charged at a rate of 3% of the land’s market value, and operates on a self-assessment basis.

However farming organisations and rural TDs have said the proposed RZLT will pose significant difficulties for farmers whose land has been zoned as residential and is serviced.

Cllr McGloin said: "Because of the price of houses as currently set by the market, the incentive for any developer to go in isn't there.

"We are asking that the government would look at a scenario whereby the RZLT would be reviewed and focus on areas like the cities where the pressure is on as opposed to areas like Leitrim where property prices are still below an average price of about €200,000."

Cllr McGloin said he felt developers have no incentive to develop on a greenfield site, saying "the various charges, particularly by Irish Water – the exorbitant charges and then development costs."

He described the tax as a “sledgehammer to crack a nut” saying the tax shouldn't be imposed on counties outside of the main city areas where the demand for housing "is huge and there are huge profits and the possibility of good margins."

"Our difficulty here in the county is encouraging developers to build on serviced sites and I think there should be a two-fold aim in terms of RZLT in that, for rural areas like Leitrim, there needs to be a rethink."

He said he feared the county was heading into a "very difficult time next year when these taxes are imposed by Revenue on landowners. We as elected representatives need to put more pressure back on Government to relook at this particular policy."