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Landowners warned over new residential site tax

Landowners have been urged to check whether their site could be liable for a new tax – following the publication of a draft map of residential zoned land that is well-serviced for development.
Galway County and City Councils have been charged with setting up the new system for levying the tax, but it will be taken over the Revenue Commissioners once it is in place from February 2024.
The scheme has been brought in to address the lack of housing, with only one sixth of residential zoned land developed for housing during a local authority’s six-year development plan
Landowners have until next January 1 to make a submission to the Councils disputing their inclusion in the map or nominating another site that should attract the charge, which has been called Residential Zone Land Tax (RZLT).
At this stage it is impossible to say how many landowners will have to cough up for the new tax, which has been set at three per cent on the market value of the site, explains Senior Planner in Galway County Council Valerie Loughnane.
“There’s 1,274.5 hectares [3,149 acres] in Galway that is on the draft map but not all of that land is undeveloped so it’s impossible to say how many landowners are affected. It’s included if it has town centre, village centre or urban centre zoning but also whether it has water, wastewater, footpaths, lighting so there are a lot of boxes to tick.”
Land on the map will also be excluded if the landowner can prove they pay Local Property Tax (LPT) for a home built on the site. Although they are included on the map, residential properties are not subject to the new tax if they are liable for LPT and owners are not required to make a submission to remove their property from the map.
Landowners in Loughrea and Athenry will escape the tax for at least the first year until their area plans are completed with updated zonings.
Just because the land is included in the RZLT map does not mean that it will get planning permission, reveals Senior Executive Planner on Galway County Council Brendan Dunne.
“This is only the start of the process and the criteria is set by the Local Government Department. It’s not a planning exercise. We look at a whole range of different criteria when it comes to planning permission. This is part of the Government’s Housing For All Plan to get things moving and activate vacant land for residential purposes.”
The process involves first identifying and mapping of land that could be liable for the tax. Submissions will be assessed by Council staff and a report prepared for the Department. A supplemental map will be published on May 1, which will also be open to public submissions. The final map of land in scope for the tax in the local authority area will be published on December 1, 2023 after which the tax will be charged by Revenue.
There are no details yet on how the land valuations are calculated but are likely to be on a sliding scale for an area similar to the LPT.
The draft map can only be viewed online at the public counter of the planning offices.
The final map will be revised annually from 2025 onwards.

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