2025-12-09

Anois, bogfaidh muid ar aghaidh chuig Ceist Uimh. 4 in ainm an Teachta Roderic O’Gorman. Tá an Teachta Boyd-Barrett á glacadh.

4. Deputy Roderic O'Gorman asked the Tánaiste and Minister for Finance the amount of revenue generated from the rezoned land tax in 2024 and in 2025; the number of landowners who sought exemptions from the tax; the number that were granted; the percentage of the overall land covered by the tax that was granted an exemption; and if he will make a statement on the matter. [64997/25]

The residential zoned land tax, RZLT, was introduced with the intention of trying to deal with land hoarding and to activate land that could be used to build housing. The first liability date was 1 February this year and payments were due in by May of this year. How much revenue has been generated? How many landowners who sought exemptions from the tax? How many were granted? What percentage of the overall land covered by the tax was granted an exemption? We want to see how effective this is.

Residential zoned land tax is a self-assessed annual tax that is calculated at 3% of the market value of land within its scope. It is charged on 1 February each year beginning, as the Deputy said, in 2025 and it applies to land that is zoned for residential use and is serviced and identified on maps published by local authorities, but which is not residential property. The RZLT aims to prompt residential development by incentivising landowners to activate existing planning permissions, or to engage with planning authorities to seek planning permission in respect of relevant land. Revenue has advised that as of 14 November the receipts from RZLT were circa €46 million. There were no receipts in 2024 as the tax was first charged on 1 February 2025. Information in respect of the amount of RZLT declared, the number of exemptions claimed, and the total hectares returned, including and excluding exempt land, is published within the October 2025 property taxes report available on the Revenue website: www.revenue.ie/en/corporate/information-about-revenue/statistics/property-taxes/yearly-stats/2025/index.aspx. It shows that as of 30 September 2025, there had been 2,433 registrations for RZLT and 2,002 RZLT returns filed. Of those returns filed, 160 applicants claimed the exemption and 585 requested a deferral. The most common reason to claim an exemption is to request a rezoning of land, which is allowed for in the legislation, to reflect ongoing economic use. Updated data from relevant local authorities identified 131 submissions which stated that the land subject to the rezoning request was the subject of ongoing economic use. A variation process which recommends rezoning is proposed in 49 of these submissions. In the context of amount of land involved, in total 3,597 ha were declared, with 3,283 ha liable for the tax. In other words, 314 ha were exempt. The latter comprises 8.7% of all declared land. The Deputy can rest assured that the continuing effectiveness of the measure in terms of achieving its objective will be kept under review.

Eight per cent was deemed exempt. Am I right in saying that a significantly higher proportion has been deferred?

That is correct. Some 160 claimed exemptions and 585 requested deferrals.

Which means that about a quarter got referrals. That is a significant rate of deferral. Will the Tánaiste indicate the reasons for those deferrals? Will he provide any information he has on them? Obviously, the whole point of this is to activate land in order to deliver housing and deal with the scourge of land banking and speculation. As we know, both are widespread. If one quarter of those involved received deferrals, we need to know why they got them and whether they were justified.

The deferrals relate to people seeking to change the use of land. However, I will get the specific note from Revenue in relation to that for the Deputy. The tax is working reasonably well. The other questioner here, Deputy O'Gorman would have pushed for this and was an active supporter of it within the previous Government. We brought it in, and we are seeing some encouraging signs. The Deputy may have seen that the CSO published a report last week which shows that the number of transactions involving residential zoned land in 2024 was significantly up on that for 2023. We are seeing, both anecdotally and in CSO data, a bigger churn of residential zoned land transactions, which is really what we want. If a someone has land and is not going to use it for residential property, they need to pay the tax, seek a rezoning or a change to alternative use or sell it off to somebody who will use it. There is some encouraging data in relation to that. I will try to get more information for the Deputy on the reasons for the deferrals.

As I reflect on the figures, I can see that the main purpose is to activate land and to deal with land hoarding. If three quarters of the people involved paid the tax, that means they are not acting on it. They are willing to pay the tax. We have said from the outset that we thought 3% was too low because the appreciation in the value of land that people are sitting on is probably significantly in excess of 3% at the moment. It can still pay for land speculators and hoarders to just sit on land. They pay the tax - which, it would seem, they are doing - but they are still making money off the land because its value is going up. This suggests that we need much more aggressive measures in order to deal with land hoarding by people who are trying to profiteer from the housing crisis.

In my new role, I am learning not to muse on tax changes outside of a budgetary process other than to say that we continue to keep the effectiveness of the tax under review. We will continue to review it in advance of forthcoming budgets. Our view is that we have a tax in place in relation to taxing residential zoned land where there is not residential property on it. We have put a system in place. This was important. A farmer using land for ongoing economic activity was never what any of us was trying to address. There were teething issues, if I can put it like that, in that regard. Providing a mechanism for people who want to use land for an ongoing economic use is something we are all fine with; it is appropriate. That is working its way through the system as well. As the Deputy stated, this is the first year of it. We are seeing revenue from it of about €46 million. However, as with the earlier question, the aim is to see changed behaviour and people not land hoarding during a housing emergency. We continue to keep the effectiveness of it under review.