Richard Boyd Barrett probes residential zone land tax results

Minister, the residential zone land tax 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 February 1st this year. Payments were due in by May of this year. So the question I set out is how much revenue has been generated? The number of landowners who sought exemptions from the tax, the number that were granted and the percentage of the overall land covered by the tax that was granted an exemption. So we want to see how effective it is. Thanks very much Deputy Boyd Barrett. So residential zone land tax, as you know and say, is a self-assessed annual tax which is calculated at 3% of the market value of land within its scope. It's charged on the 1st of February, each year beginning, as you say, this year in 2025. It applies to land which is zoned for residential use and is serviced and identified on maps published by local authorities, but which is not a residential property. 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 have advised that as of the 14th of November, the receipts for RZLT were around 46, circa 46 million euro. There were obviously no receipts in 2024, as the tax was first charged on 1st of February 2025. Information in respect to 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. But let me share what I have. It shows that as of the 30th of September of this year, there have been 2,433 registrations for the RZLT and 2,002 returns filed. Of those filed returns, 160 have claimed the exemption and 585 have requested a deferral. The most common reason to claim an exemption is to request a rezoning of the land which is allowed from 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 subject to an ongoing economic use. A variation process which recommends rezoning is proposed in 49 of these submissions. In relation to the amount of land, in total, 3,597 hectares of land were declared, with 3,283 hectares liable for the tax. In other words, 314 hectares were exempt, which makes up 8.7% of all declared land. So 8.7% of what was declared was deemed exempt. But the Deputy Congress is assured that the continuing effectiveness of the measure in terms of achieving its objective will be kept under review. 8% was deemed exempt. Am I right in saying it is a significant higher proportion? Just to understand what you have said, a significantly higher proportion has been deferred. Correct. Correct. Correct. 160. Sorry. 160 have claimed an exemption and 585 have requested a deferral, so more have requested. Okay. So 585, which is about a quarter, have got deferrals. Correct. So that is a significant rate of deferral. Could you maybe indicate what the reasons for those deferrals were, or any information you have about why those deferrals? Because obviously the whole point of this is to activate land to deliver housing and to deal with the scourge of land banking and speculation, which we know is widespread. So if a quarter of the number has received deferrals, we need to know why they were getting those referrals and whether it was justified or not that they would get deferrals. Yes. So I think it is the deferrals in relation to people seeking to change the use of the land. But let me get you a specific note in relation to that. My view on this is that it is working reasonably well. I know the other questioner here in Deputy O'Gorman would have been a very active supporter of this within the last government. We did bring it in and we are seeing some encouraging signs because the CSO, you may have seen last week, I think the CSO had a report published that showed the number of transactions of RZL land being significantly up in 2024 and 2023. So we are seeing both anecdotally in our conversations but also actually in CSO data now, a bigger churn of residential zoned land now being transacted, which is really what we want to do. If you have the land and you are not going to use it for residential property, you either need to pay the tax, you either need to seek a rezoning or an alternative use of it or you need to sell it on to somebody who will zone it. So there is some encouraging data in relation to that. Let me try and get you more information in relation to the reasons behind the deferrals. Yeah, and actually now as I reflect on the figures, I mean the big purpose is precisely to activate the land and deal with land hoarding. So if three quarters of the people paid it, then that means they are not acting on it. They are willing to pay it. And we have said from the outset that we thought 3% was too low, because the appreciation the value of land that you are sitting on is probably in excess of 3%, significantly in excess of 3% at the moment. So it can still pay for land speculators and hoarders to just sit on land. They pay the tax, as it would seem they are paying the tax, but they are still making money off the land because its value is going up. Which suggests we need much more aggressive measures in order to deal with land hoarding by people who are trying to profiteer from the housing crisis. I am in my new role not to muse on tax changes outside of a budgetary process, other than to say that we do continue to keep the effectiveness of the tax under review. And we will continue to review it in advance of budgets. Our view though is we have a tax in place now in relation to taxing residential zone land where there is not a residential property on it. We have put a system in place and I think this was important. I mean a farmer using it for ongoing economic activity was never what any of us were trying to do and there were teething issues if I can put it like that in relation to that. So providing a mechanism for people who have that ongoing economic use is something I think we are all fine with, it is appropriate. I think that is working its way through the system as well. As you say this is the first year of it and we are seeing revenue from it of about 46 million euro here, but the aim here isn't to see, but like the earlier question, the aim here is to see change behaviour and people not land hoarding in a housing emergency and we continue to keep the effectiveness of it under review.