Landowners can avail of an exemption from the Residential Zoned Land Tax (RZLT) in 2025 if they seek to have their land rezoned to reflect the activity they carry out on their land, the government has announced as part of Budget 2025 in the Dáil today (Tuesday, October 1).

The government had been working to deliver a "solution" to the issue of farmland being subject to the tax which will apply from February 1, 2025, at a rate of 3% of the land’s market value.

The RZLT aims to increase housing supply by activating zoned and serviced residential development lands (including mixed-use lands) for housing.

Budget 2025 was signed off by Cabinet this morning and has been presented to the Dáil by Minister for Finance, Jack Chambers and Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe.

Announcing Budget 2025 today, Minister Chambers said: "The Residential Zoned Land Tax is an important lever to activate the building of houses on appropriate sites which have been identified by local authorities across the country.

"Therefore, I am providing opportunity for these landowners to avail of an exemption in 2025 if they seek to have their land rezoned to reflect the activity they carry out on their land.

"The Minister for Housing, Local Government and Heritage will issue guidelines to local authorities indicating that they should consider and accommodate rezoning requests where landowners seek to continue undertaking existing economic activity."

RZLT maps are based on the zonings included within city/county development plans and local area plans. However, neither of those plans provide an indication of current land use, so whether or not it is in agricultural use.

The tax was previously deferred in Budget 2024 to undertake a process where applications could be made to local authorities to request rezoning of land. This process allowed farmers to request rezoning.

Minister Chambers previously said he would bring a "solution" to government party leaders to exclude active farmland from the tax. He said the majority of farmers who sought to remove themselves from the RZLT have not been able to do so this year.

Local authorities published annual draft RZLT maps on February 1, 2024, that identify lands that fall within the scope of the tax, as well as land which they propose to exclude from the previous year’s annual final maps for 2025. 

Overall, circa 52,000ha of land is identified on the draft maps, while circa 49,300ha of land is proposed to be retained on the maps, Minister for Housing, Local Government and Heritage, Darragh O’Brien said.

A “significant” amount of the overall land included on the maps is land that is zoned for existing residential development, and where a property is liable for Local Property Tax (LPT), the relevant land is not liable for the RZLT.

The overall amount of land zoned for “new residential” development which will be subject to activation from the tax is estimated to be circa 6,200ha. However, this figure is based on estimates, the minister said.