Concern in Clare over zoned land tax plans

CLARITY has been sought by several councillors on the impact of the new Residential Zoned Land Tax which the Government is to introduce in 2024.

At a meeting of the Council’s Rural Development committee, members expressed concern about what the new tax could mean for land owners.

In a presentation on the Draft County Development Plan 2023-2029, senior planner Helen Quinn also outlined what is known about the tax.

“This is a new proposal from government and has been outlined in the Finance Act (2021), which was signed in last days of December,” she said.

“It means that a tax of 3% of site value (will be levied) with the aim of activating land for residential purposes. It will replace the vacant sites levy which applied to residentially zoned lands and mixed use. The new tax will be operational from February 1 2024 and will be collected by Revenue.”

Ms Quinn explained that the role of the local authority is to produce a draft map of lands where the Residential Zoned Land Tax might apply.

The map will be drawn up in November and the public will have opportunity to make submissions in January of next year.

Determinations will then be made by the local authority and there is also a mechanism whereby appeals can be made to An Bord Pleanála.

After a further round of submissions and determinations, the final map is expected to be drawn up by December 2023, with the tax coming into force by the following February.

After thanking Ms Quinn for the presentation, Councillor Pat Burke asked if the tax will apply to strategic reserve land as well as zoned lands.

Denis Tuohy, the IFA representative on the committee, said it is important for farmers to make themselves aware of the tax implications.

“At IFA, we are waiting for direction on the tax. Farmers are encouraged to examine this. We are very aware of the tax plans and IFA is likely to make a submission on that.”

Ms Quinn outlined that it remains unclear whether the tax will apply to strategic reserve land.

“The guidelines might expand on that when they come out,” she said. “Right now, it does say that any lands on which residential development can be accommodated would be liable – e.g. lands with mixed use zoning.

“Strategic reserve land is not immediately available for residential development. We will have to get clarity.

“A lot of other local authorities have these lands, we’re not going at this alone. Other local authorities will have this issue. I would hope that the guidelines will address this issue.”

She added that a submission from the IFA would be appreciated. Councillor Joe Killeen agreed that further details are needed.

“We need clarity on who and what will be taxed,” he said. “If we let people know, they might not want their lands zoned. What’s the legal position? If I wasn’t notified that my land was zoned, who is responsible?”

Chairperson of the committee, Councillor Pat Hayes said public engagement will be essential and asked if the new tax will apply to lands zoned currently or to those which the new plan proposes to zone.

“What about a genuine landowner who puts up a For Sale sign and nobody comes along?” he asked. “What happens then?

“It’s like the pub closing and the For Sale sign going up to avoid rates. There are a load of angles to this. When people are dealing with Revenue, it won’t be easy.”

Ms Quinn replied that is currently unclear as to who is responsible for notification on the issue. She said that currently those actively farming are not subject to vacant sites levy.

“There are a lot of issues that need to be looked at and they probably are being looked at,” she said.

The Residential Zoned Land Tax was introduced by Government with the aim of boosting the supply of housing.

It will replace the current vacant site levy and have a starting annual rate of 3% on the market value of the and.