‘Developers standing back' as land tax stalls interest in zoned farmland
It comes as the Government ramps up pressure on local authorities to zone more land for housing, with Housing Minister James Browne set to write to county councils this week to get the process moving.
IFA farm business chair Bill O'Keeffe said developers, approved housing bodies (AHBs) and financial lenders are all standing back from purchasing zoned land in many cases due to the tax liability and wider market challenges.
'Affected farmers live in fear of the tax implications of RZLT [Residential Zoned Land Tax], and its introduction has not increased interest from potential buyers,' he said.
Developers, he added, are standing back from purchasing zoned land in many cases, until the many other obstacles that are restricting housing development – finance, pre-planning investigations, labour and materials – are in place.
The stated aim of RZLT was to encourage housing development, but it's doing the exact opposite
'There are several hoops to jump through to avail of the one-year exemption and we're calling for all actively farmed land to be permanently excluded,' he said.
He criticised the current system, which requires affected farmers to make a submission to de-zone their land and then make a return to Revenue before May 23 to qualify for the 2025 exemption.
'The stated aim of RZLT was to encourage housing development, but it's doing the exact opposite,' he said.
Meanwhile, top home builder Glenveagh said the RZLT is now a 'factor' in how it assesses potential land deals.
"From our perspective, the RZLT is a factor that we need to consider when assessing potential land acquisitions and, indeed, in determining the need for site sales where other players in the industry may be able to develop a particular site more quickly than us, for example."
However, it also said the RZLT is supporting in keeping residentially zoned land flowing through the system and in the hands of people who can develop it as efficiently as possible.
The pressure on landowners comes as RTÉ reported at the weekend that the Government will instruct county councils to reopen their development plans and rezone more land for housing under a Section 28 Direction.
The move is aimed at speeding up the delivery of over 300,000 homes by 2030.
However, as the planning and zoning landscape shifts, Glenveagh is continuing its push to partner with farmers to identify new housing sites.
The developer's land partnerships initiative, launched in 2022, offers landowners the chance to engage in joint deals where Glenveagh takes on the cost and risk of achieving planning permission.
In return, farmers retain ownership of their land until permission is secured and typically receive a higher sale price.
'We remain open to opportunities for similar partnerships with landowners,' Glenveagh said. 'Based on our experience to date, this has been a very constructive way to identify sites close to the necessary infrastructure and amenities.'
It says several sites secured through this model are now at various stages of planning and, if permission is granted, could support the delivery of a significant number of homes.
The company said its experience has shown that partnerships like these can help unlock value in the land and streamline the development process in regions where demand for housing is high.
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