Tax designed to halt hoarding of land is shelved
A TAX aimed at preventing hoarding of land zoned for housing has been delayed by a year, the Minister for Finance has revealed.
It comes as new and enhanced tax reliefs for renters and landlords were announced in yesterday’s Budget, but few new measures aimed at stimulating housing delivery.
The Residential Zoned Land Tax (RZLT) was announced in Budget 2022 in a bid to unlock land banks already zoned for residential development.
The 3% levy, widely criticised by the Opposition at the time as being too low, was due to first be collected in February 2024.
There has been major opposition to the move, particularly from farmers whose land was due to be included in the tax.
The deadline for disputes to have land excluded from the RZLT has lapsed and appeals are currently being assessed.
Deferred until next year
In his Budget speech yesterday Minister for Finance Michael McGrath said that the tax was being deferred until next year.
He said: ‘The Residential Zoned Land Tax, or RZLT, is an important initiative to activate suitably zoned and serviced land for housing.
‘It is important that affected landowners have sufficient opportunity to engage with the mapping process and that a fair and transparent process is applied when local authorities consider what land should be placed on the RZLT maps.
‘Therefore, I am extending the liability date of the tax by one year to allow for the planned 2024 review of maps to take place and to afford affected people with a further opportunity to engage with the process.’
Sinn Féin Housing spokesman Eoin Ó Broin said that the delay is ‘another example of the government having no coherent plan for active land management’.
He went on: ‘They made big promises two years ago about this tax, it was clear as they brought it through the Oireachtas they hadn’t it thought it through properly.’.
Mr Ó Broin said that the Government continues to announce plans before they are fully worked out.
The Minister for Housing Darragh O’Brien said that he believes providing greater relief to landlords over renters has struck ‘the right balance’.
Tax breaks for landlords who agree to stay in the rental market for four years were unveiled in yesterday’s Budget.
Under the scheme, which will cost €160m annually, landlords will receive between €600 and €1,000 each year over a four-year period.
Mr O’Brien described the measure as ‘an important step’ to retaining landlords in the rental market.
‘We need a functional private rental sector, meaningful and effective measures to attract and retain landlords; this will go some way to doing that on the basis they stay in for four years,’ he said.
Separately, the Budget included an increase in rent relief from €500 to €750 for each tenant annually and cost €88m next year.
‘It’s effectively a month’s rent… I’d like to see more people claiming it.’
A campaign by the Revenue Commissioner will encourage people to claim tax relief available to them.
The scheme has been widened to include parents who pay for their children who are renting using the Rent a Room scheme or digs accommodation and will be backdated for 2022 and 2023.
At the post-Budget press conference last night, Mr O’Brien announced he would seek Cabinet approval for an additional €6.7bn for the Land Development Agency (LDA).
Mr O’Brien denied, when asked by this newspaper, that the failure to have the announcement included in the Budget amounted to him not having his homework done on time.
Pressed on the detail of the scheme Mr O’Brien said €4.7bn would be through capitalisation of the LDA and the remaining €2bn would be through increased borrowing capacity.
The vacant property tax has been increased to five times the existing basic property tax rate and will come into effect from next month.
Mr O’Brien said he believed this was an important aspect of increasing housing stock.