Residential Zoned Land

The Residential Zoned Land Tax is a new tax that was introduced in Finance Act 2021. It applies to land that is both zoned as suitable for residential development and is serviced. This is an annual tax, which will be first due in 2024 in respect of land which met the relevant criteria on or before 1 January 2022 and which is reflected on the map to be published by local authorities on 1 December 2023.

Although appearing on zoned land tax maps, residential properties are excluded from the scope of the tax.

Residential Zoned Land Tax will apply annually at a rate of 3% of the market value of the land. The land will be required to be revalued every three years from the initial valuation date.

The tax will be first due on 1 February 2024 and payable in May 2024 in respect of land which was suitable for residential development on 1 January 2022, because it was both zoned and serviced on that date. Where land becomes both zoned and serviced after 1 January 2022, tax will be chargeable in the third year after the year in which it comes within the scope of the tax.

Apart from owners of residential property subject to Local Property Tax, there are no further specific exemptions for particular categories of landowners and as such where agricultural land meets the criteria for falling into scope for the tax, owners of this land will be liable.

In addition to residential properties, certain types of land are excluded from the tax despite being zoned for residential use and serviced. These include:

  • Land that, while zoned residential, is an authorised development used to carry on a trade or profession by a business liable to pay commercial rates, and which provides services to residents of adjacent residential areas, for example shops or pubs, or employment uses, such as offices.
  • Land that, while zoned for mixed use, including residential use, is an authorised development which is required for or integral to the operation of a trade or profession being carried out on or adjacent to the land.

If land meets either of these descriptions, it will not be included in a zoned land tax map.

In addition to the process of being able to make submissions against inclusion of land on the map and to appeal a decision to retain land on the map, a landowner may also submit a request to a local authority to vary the zoning status of their land. If the request relates to land included on the draft map published by the local authority, the request must be made by 1 January 2023; if it relates to land on a supplemental map which will be published by 1 May 2023, then the request must be made by 1 June 2023. This request will be considered by the local authority in the context of the adopted development plan, taking into account the proper planning and sustainable development of the area.

If you are a landowner with residentially zoned land or a developer wishing to purchase and develop zoned land, or wish to appeal the zoning of your land, contact one of our property Solicitors for specialist advice.

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