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  • The Gov.ie website gov.ie – Residential Zoned Land Tax (www.gov.ie) states that the Residential Zoned Land Tax is a new tax aimed at increasing housing supply by activating zoned, serviced residential development lands (including mixed-use lands) for housing. It records also that the Tax aims to incentivise landowners to use existing planning permissions for housing. The Tax is being introduced as part of Housing for All, the government’s housing plan to 2030.

    The annual Tax will apply at a rate of 3% of the land’s market value. The Tax will operate on a self-assessment basis.

    The far-reaching consequences of this legislation

    I believe that many do not realize the consequences of this far-reaching legislation. Despite the fact that you are not a Developer and have never had any intention of developing your property for speculative purposes, if you are unlucky enough to have your plot of property
    zoned under this new Act and do not manage to have it taken out the zoned area you will be liable from 2024 onwards to a 3% Annual Tax on the value of the property. You might be a farmer who just happens to have land on the town boundary.

    Self-Assessment Tax with penalties and surcharges

    This will be a Self-Assessment Tax with penalties and surcharges for late Returns and under-values. Underpayment of the Tax will also constitute a Charge (akin to a Mortgage) on your property, which could effectively prevent you from selling or even gifting the property. And once your land is zoned there is the possibility that it will be over-valued by the Revenue Commissioners – on the assumption that you could get Planning Permission for development, despite the fact that the legislation expressly states that being zoned is no guarantee of Planning!

    This Tax should not be confused with the Derelict Sites Levy, where under the Derelict Sites Act 1990 your derelict property can be registered by the Local Authority on the Derelict Sites Register, leaving you as owner of the property liable to the Derelict Sites Levy of 7% per annum.

    You only have up to the end of December to make your Submission to your Council as to why your property should be removed from the zoned area; and bear in mind that most professional offices will close for Christmas at the end of next week!

    Read my Article (also on the Morgan McManus website) for a review as to what you should do to make a Submission seeking to avoid being zoned: Residential Zoned Land Tax – Have you been Zoned?

    Brian Morgan
    Morgan McManus Solicitors

    Web: www.morganmcmanus.com
    Email: bmorgan@morganmcmanus.ie
    Ph. No.: 00353 47 51011