Budget 2025 and Changes to Residential Zoned Land Tax

Rezoning request

Where lands appear on maps published by local authorities on 31 January 2025 landowners will have an express right to make a rezoning request to the local authority. If successful, this will effectively result in an exemption from RZLT of lands zoned for residential development but currently used for activities inconsistent with that zoning (including, but not only, farming). The request may be made from 1 February to 1 April 2025. Requests for rezoning may not be made if the land is the subject of a current planning application or permission for residential development. Persons who make a successful rezoning request under this provision will not be liable for RZLT for 2025 or subsequent years.

Exemption for JR proceedings taken by an unconnected third party

A new exemption from RZLT will apply if judicial review proceedings are taken, or an appeal of a judicial review determination is made, by an unconnected third party. This recognises that the land is not capable of development while the judicial review proceedings are ongoing. The exemption, which will apply from the date of grant of the planning permission the subject of the judicial review, until the end of those proceedings, whatever the outcome of the judicial review, replaces the existing deferral for the same period.

Improvement in deferral for appeals taken by an unconnected third party

Where planning permission is granted but appealed to An Bord Pleanála by an unconnected third party there is existing provision for RZLT to be deferred from the date the appeal is made to the date that it is determined, leaving a gap between the date of grant of planning permission and the date of the appeal, during which the charge to RZLT accrues without the developer being entitled to commence development of the land. The Finance Bill proposes to commence the deferral period from the date of the grant of the planning permission, closing out the question of liability arising until after the appeal is determined. This in line with the approach and the timelines applicable to (what had been the deferral and is now the exemption) for judicial review proceedings. This is confined to third-party appeals only, not landowner appeals.

No clawbacks for group company transfers

Subject to certain conditions, the existing deferral of RZLT on commencement of residential development and the new pre-development deferral referred to below will not be clawed back on account of transfers of land during the period of development between companies in a capital gains tax group that are both within the charge to Irish corporation tax. For all such deferrals the transferee company will become the liable person for RZLT but both companies will have joint and several liability for any tax payable.

New 12-month pre-development deferral period

Where planning permission is granted, subject to certain conditions, RZLT may be deferred for a “pre-development” period of up to 12 months from the date of the grant of planning permission. This facilitates a 12-month deferral of RZLT while the developer is preparing to commence construction but, importantly, the deferral ceases if the land (or part of it) is transferred except, as noted above, where the transfer is between companies in a capital gains tax group that are both within the charge to Irish corporation tax. If the deferral has not ceased and a commencement notice relating in whole or in part to residential development is lodged within the 12-month period, then the RZLT may continue to be deferred according to the existing rules for its deferral on commencement of development. If the commencement notice relates to a non-residential development, the deferred RZLT will not be payable.