COMMERCIAL REAL ESTATE | INSIGHTS | BY SIOBHÁN WHELAN
The deadline date for filing a Residential Zoned Land Tax (RZLT) return is on or before 23 May 2025.
Who is the Liable Person
The owner of the relevant site on 1 February 2025 is the liable person for filing the RZLT return. Notably a wide definition is accorded to the ‘owner’. It defines the owner as including:
- the registered or deemed registered owner,
- a person, other than a mortgagee in possession, who, in his or her own right or as trustee or agent for any other person, is entitled to receive the rack rent of the land, or would if the land was so let, and
- any other person whose interest in the land entitles them to develop the land.
This definition would include developers with contractual rights to develop the land. If there is more than one owner of a relevant site then only one return needs to be filed by a Designated Liable Person on behalf of all of the owners.
What land does it apply to?
Where land is zoned for residential use and is serviced with essential infrastructure sufficient to enable housing to be developed then it will be deemed a “relevant site” and subject to RZLT.
Local authorities have been charged with the task of drawing up the RZLT maps of the land which is being proposed will be subject to the tax and these maps are set to be published annually. Owners are required to review these maps to confirm if their land is subject to the tax. RZLT is a self-assessed tax and the owner is responsible for valuing the lands accurately. Only relevant sites which met the criteria on or before 1 January 2022 will be included in the RZLT map in 2025. After that date, land that met or meets the relevant criteria will be subject to RZLT in the third year after the year it came within the scope of the tax.
The rate of the levy is 3% of the market value of the relevant site. Interest, penalties and surcharges may apply should the Relevant Person not comply with their obligations.
Land excluded
Land excluded from the remit of the tax include land zoned which are either residential or a mixture of residential and other uses, are authorised developments used to carry on a trade or profession, liable for commercial rates and provide services to residents and adjacent residential areas, and sites designated as a derelict site and subject to the Derelict Site Levy.
While residential properties are excluded from the scope of the tax there is a distinction however for residential properties where the gardens and yards enjoyed with the residential property exceed 1 acre (0.4047 hectares) and are liable for Local Property Tax (LPT). In these cases, while they are not liable for RZLT, the owner of the property will still be required to register for RZLT if their property has been included on the RZLT final map.
Will remain a charge against the property
Where an owner fails to pay the tax, underpays or fails to register for RZLT then tax and interest will apply at a rate of 8% per annum and it will remain a charge against the property. It is a self-assessment tax but in instances where the land is largely undervalued then a surcharge may be applied.
A vendor of a property liable for RZLT will not be able to complete the sale of a property deemed a relevant site until all outstanding liability is paid, including accrued interest and any penalties. A Purchaser’s solicitor will look for confirmation of the relevant site as having been registered for RZLT and any liabilities paid up to date, similar to the current revenue LPT system in place.
How we can help
If you have any queries or concerns, or would like to discuss the above in further detail, please feel free to contact Siobhan Whelan in our Real Estate Department ([email protected] /+353 (0)1 440 8339).
This article is for general information purposes. Legal advice must be obtained for individual circumstances. Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.