Residential Zoned Land Tax (RZLT)
17/02/2025 15:31:58The Conveyancing Committee has published new Requisition 45 to coincide with the commencement of the Residential Zoned Land Tax (RZLT) which was introduced in the Finance Act 2021.
The first liability date for RZLT was 1 February 2025.
This new requisition is being inserted at the end of the existing Requisitions on Title 2019 for convenience but will be inserted more appropriately when the review of the Requisitions is completed. The Requisition may be updated as the committee’s engagement with the Revenue Commissioners continues. In the text below, the Act means the Taxes Consolidation Act 1997 as amended.
This note is produced for conveyancing purposes only. It ought not to be relied upon as an interpretation of Part 22A of the Act. It provides some preliminary guidance on appropriate requisitions on title regarding RZLT. A revised set of Requisitions may be issued following further engagement with Revenue.
Where appropriate specialist tax advice ought to be obtained in respect of liability or potential liability to RZLT. This will be particularly important in acting in the purchase of development land (with or without planning permission), and land in respect of which payment of RZLT has been or may be deferred.
New requisitions and guidance
Residential property is defined as any building which is in use as, or is suitable for use as, a dwelling including sheds or garages and yards or gardens not exceeding 0.4047 hectares usually enjoyed with the residential property, as defined in the Finance (Local Property Tax) Act 2012.
New Homes
If the property is a new home in the course of construction, an appropriate reply would be “The property comprises a dwelling in the course of construction and a Certificate of Compliance on Completion will be furnished prior to completion. These requisitions are not applicable”. Revenue has confirmed that once the Certificate of Compliance on Completion issues, the property covered by the Certificate is not liable to RZLT.
There is no liability to RZLT in respect of land in excess of 0.4047 hectares appurtenant to or usually enjoyed with residential property but there is an obligation to register as owner of the site. See requisition 10A.10 below.
Where the answer to 10A.1 is Yes and the answer to 10A.2 is No, then it is not necessary to reply to the subsequent requisitions, and a reply “10A.3 to 10A.11 Not Applicable” is appropriate.
If the property is not a residential property (as referred to at 10A.1 above) and is included in the Final Map or Revised Map prepared by the local authority pursuant to s. 653K or 653M of the Act, then it is a relevant site.
If a vendor replies that the property has previously constituted a “relevant site”, responses to subsequent Requisitions would be expected to explain why the property is no longer a relevant site for the purposes of RZLT and address how any liability for RZLT whilst it was a relevant site has been dealt with.
If the property is not included in the Final Map or Revised Map then it is not a “relevant site” and is not subject to RZLT. However, submissions can be made to have property included as part of the process of preparing the Final Map or Revised Map. Requisitions 10A.5 to 10A.8 should be replied to.
Submissions can be made by the owner or a third party and can seek inclusion or exclusion of a site from the Final Map or Revised Map. Purchasers may wish to investigate all submissions made to the local authority, and all requests by the local authority for information. This can include information from the owner of the site, Uisce Éireann, the National Roads Authority, or other Government agencies and bodies listed in article 28 of the Planning and Development Regulations 2001.
It may be necessary for the purchaser to seek additional information once the summary has been furnished.
The owner of a property can make a submission to the local authority requesting a change in the zoning of property (to include de-zoning) under s. 653I of the Act.
It may be necessary for the purchaser to seek additional information once the summary has been furnished.
Decisions of the local authority in respect of submissions made by the owner in respect of a Draft Map or Supplemental Map can be appealed to An Bord Pleanála.
It may be necessary for the purchaser to seek additional information once the summary has been furnished.
The vendor of the property should outline any exemption from, deferral or abatement of payment of RZLT that applies or has in the past applied and the basis upon which such exemption, deferral or abatement is or has been claimed or identified.
It may be necessary for the purchaser to seek additional information once the summary of any such exemption, deferral or abatement has been furnished.
This requisition is intended to elicit whether any judicial review of any decision of the local authority or An Bord Pleanála has been instituted or threatened, or whether the owner or a third party has challenged or threatened to challenge the Act insofar as it relates to the property. It also seeks confirmation that there is no dispute with Revenue on any RZLT matter.
“Owner” is defined broadly in the Act and includes persons with a right to carry out development on the property. Owners are required to register with Revenue as the owner of a relevant site, which includes all property included on a Final Map or Revised Map other than residential property. Where the property includes land usually enjoyed with the property as its garden or grounds in excess of 0.4047 hectares, the owner is required to register it with Revenue albeit no RZLT is payable.
A vendor liable to RZLT is required to pay the RZLT plus any accrued interest and penalties before the completion of the sale. When paid, Revenue is required to provide confirmation that there are no outstanding amounts payable. Such confirmation should be obtained by a purchaser on or before completion.
However, Revenue has advised that it does not consider this a clearance procedure, and in its view it retains the ability to pursue outstanding RZLT notwithstanding the issue of such confirmation. Practitioners need to be aware that any outstanding amount due in respect of RZLT (including penalties and interest) is a charge on the property to which it relates under s. 653Q(4) of the Act.
Section 653(Z) of the Act requires the vendor, before completion, to deliver this return to Revenue, with details in respect of the property being sold, and of the vendor. The return also requires details in respect of the purchaser (including tax number(s)) which the purchaser will need to provide.
