Do you need to pay Residential Zoned Land Tax?

What is the Residential Zoned Land Tax (RZLT)?

The Residential Zoned Land Tax (RZLT) is a recent addition introduced through the Finance Act 2021. It pertains to land designated as suitable for residential development and adequately serviced.

RZLT is an annual tax, with the initial payment due in 2025 for land meeting specific criteria as of February 2025, as depicted on the map issued by local authorities on December 1, 2023. The tax will continue to apply each year, provided the land remains within scope. These maps show which lands are liable for the tax, and they are updated regularly. Landowners will need to self-assess and pay the tax every year, based on the land’s market value

What is the objective of this measure?

Addressing the pressing need for increased housing supply in Ireland, the RZLT aims to encourage landowners to activate existing planning permissions for housing on identified lands or to collaborate with planning authorities to seek planning permission for suitably zoned and serviced land.

The introduction of this tax aligns with the objectives outlined in the “Housing for All” plan, the government’s housing plan for 2030, as a means to boost housing supply.

Are homeowners with residential properties on ‘Residential’ zoned land subject to RZLT?
Despite inclusion on residential zoned land tax maps, residential properties are exempt from RZLT. The definition of residential property, as per the Local Property Tax (LPT), includes gardens and other areas associated with the property up to 0.4047 hectares (1 acre). However, registration is required for properties with gardens or yards exceeding this size.

What is the rate of Residential Zoned Land Tax?

RZLT is levied annually at a fixed rate of 3% of the land’s market value. The land’s valuation must be reassessed every three years from the initial valuation date. Taxpayers are responsible for determining the market value, with potential surcharges if the land is later deemed undervalued.

What land is subject to Residential Zoned Land Tax?

RZLT applies to land zoned suitable for residential development, either solely or predominantly, or for a combination of uses, including residential.

The land must be serviced, meaning it has necessary public infrastructure and facilities in place or available for connection, and must not be adversely affected physically in a manner that impedes housing provision.

Existing residential properties may appear on local authority maps but are exempt from RZLT if subject to Local Property tax (LPT), although registration may be required for properties with gardens or yards exceeding 0.4047 hectares (1 acre).

What steps must individuals take now?

RZLT operates on a self-assessment basis. Land included in a residential zoned land tax map issued by the respective local authority falls under the tax’s purview, this makes it necessary for the landowners to inspect these maps to determine their land’s tax liability.

Although residential properties are depicted on these maps, their owners are exempt from the tax if already subject to Local Property Tax (LPT).

Consequently, homeowners don’t need to take any action regarding this tax unless their property’s garden or grounds exceed 1 acre (0.4047 hectares). In such cases, registration with Revenue is mandatory. The deadline for registration will be set prior to the first tax payment due in 2025, whereby landowners will have the opportunity to register for RZLT, albeit without an immediate obligation to pay the tax.

It’s important to note that Residential Zoned Land Tax cannot be deducted when calculating profits or gains for income tax, corporation tax, or capital gains tax purposes.

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