Update on Residential Zoned Land Tax
Practitioners are reminded that the Residential Zoned Land Tax (RZLT) was introduced in the Finance Act 2021. RZLT is a new tax aimed at increasing housing supply by activating zoned, serviced residential development lands for housing. It is an annual tax that applies at a rate of 3% of the land’s market value.
The Conveyancing Committee has previously issued Guidance Notes which can be found here:
Practitioners should be aware that where land is included on the final RZLT map prepared by each local authority that land likely falls within the scope of the tax and RZLT will be first due on 1 February 2025 and payable on or before 23 May 2025. The Committee is of the view that it is not a matter for practitioners to identify whether a property falls within the final RZLT map. This is a matter for instruction from the client.
It had been the Conveyancing Committee’s intention to issue a set of Requisitions and Explanatory Memorandum in respect of RZLT some time ago. However, the Committee has been liaising with Revenue seeking clarity on certain aspects of the implementation of the legislation, and had hoped to have this clarity before publishing Requisitions. While the discussions with Revenue are ongoing, indications are that we are unlikely in the short term to achieve the clarity sought.
The Committee is, therefore, currently finalising interim Requisitions and Explanatory Memorandum, which will take account of the information currently available. It is hoped to issue these shortly.
Practitioners are reminded that the persons liable to pay RZLT are the ‘owners’ of a relevant site which has been defined very broadly by the legislation and includes any party or person who has an interest or a right to develop the land. There are only a limited number of exclusions from the scope of RZLT and deferral of the payment is only possible in very limited circumstances.
The Conveyancing Committee recommends that practitioners familiarise themselves with the legislation if acting on behalf of a vendor or purchaser of land which falls within the local authority’s RZLT map, and that consideration be given to taking professional expert taxation advice before proceeding with the sale or purchase of any such lands.
It is anticipated that an online portal will be made available by Revenue in respect of RZLT, but the Conveyancing Committee understands that it has not been fully developed.
