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Residential Zoned Land Tax - Finance Dublin Irish Tax Monitor January 2023

Niall McCarthy, Tax Manager, Tax & Legal - Real Estate Tax

With the publication of draft zoning maps on 1 November 2022 for the purpose of the application of the Residential Zoned Land Tax, what are the key issues and concerns of the industry?

Finance Act 2021 introduced the Residential Zoned Land Tax (RZLT), an annual 3% tax charge on the market value of land within its scope. The aim of the tax is to deter land hoarding and activate zoned and serviced land for residential development.

There are certain opportunities for exclusion and a “deferral and abatement” of RZLT is available where land is developed to completion in certain circumstances.

On 1 November last, each local authority published draft maps identifying land within the scope of RZLT, with the first pay and file date arising in May 2024. In order to seek an exclusion, a submission must have been made to the local authority by 1 January 2023.

In relation to land that is ultimately in scope, a number of bodies within the construction industry have identified some key issues and concerns, in particular:

Factors outside of the control of the landowner

RZLT may only be deferred where planning permission has been granted and development has commenced. Where planning permission cannot be obtained or there are delays outside of the control of the landowner, the tax will continue to be charged. If the land is sold, development ceases permanently or the planning permission expires before completion, the deferred tax must be paid together with statutory interest for late payment (8% per annum).

Where a third party brings a judicial review application against a grant of planning permission, the tax may be deferred until the judicial review is determined. However, if the planning grant is overturned at the end of the judicial review process, the landowner must pay all the deferred tax for the duration of the proceedings, in addition to statutory interest for late payment.


The commercial viability of residential development (particularly the development of apartments) is a live issue for many in the construction industry. There are a number of factors that have already led to cost inflation in the industry, including Brexit, Covid-19 and the war in Ukraine.

To the extent a developer’s site is not commercially viable it will nonetheless suffer RZLT, thereby further exacerbating existing commercial viability issues while RZLT will ultimately be a cost that is passed on to the final consumer.


We expect this tax to be a prominent point of discussion over the coming 12 months and beyond. The first payment of the tax will be due in May 2024 and we might expect to see some legislative amendments in the meantime for RZLT to have its intended effect in activating the development of zoned and serviced land, without applying additional costs on those developers actively engaged in seeking planning permissions for the purpose of much needed residential development.

Please note this article was originally featured in Finance Dublin Irish Tax Monitor in January 2023 and was re-published kinly with their permission on our website.

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