The Beginning of the Zoned Land Tax

Amidst the current housing shortage, local authorities have been tasked with charging a vacant site levy on certain lands to encourage housing development. However, this levy will be replaced by the Zoned Land Tax (the “ZLT”) which will be charged in 2024. Unlike the vacant sites levy, the administration of the ZLT will be administered by the Revenue Commissioners and not by local authorities.
   

Who will be Taxed?

Land that is zoned solely or primarily for residential use or for a mixture of uses including residential use which has access to sufficient services and facilities such as roads, footpaths, public lighting and water supply will be subject to the ZLT.[1] Under the Finance Act 2021 (the "Act"), on 1 November 2022 all local authorities in Ireland released various maps identifying lands which will become liable for the ZLT. All lands currently deemed liable for the ZLT can be found here. Whilst residential properties may appear on the map, owners of such properties are not liable for the ZLT if they are already subject to Local Property Tax.

The Supplemental and Final Map

Local authorities will publish a supplemental map on 1 May 2023. This map will identify additional lands, which are, in the eyes of the local authority, liable to the ZLT. A final version of the maps will be issued by the local authorities on 1 December 2023. These lands will be subject to this tax unless they fall within one of the exemptions provided for under the Act.

Exemptions

Lands which are zoned for residential or mixed use to include residential use will be exempt from the tax where it is reasonable to consider that the land is integral for social, transport, energy and telecommunications infrastructure and facilities, where the land is subject to a statutory designation that may preclude development or where the land is subject to the derelict sites levy which is payable under the Derelict Sites Act 1990.

Conclusion

This tax, which is aimed at encouraging use of land will likely affect developers. It is advisable for developers or owners of large-scale developments to consult with the draft map as now published. Submissions can be made from until 1 January 2023 challenging the inclusion of particular lands in the draft map by way of appeal to An Bord Pleanala.

Written by: Paddy Smyth and Craig Byrne