What are Residential Zoned Land Tax (RZLT) Searches?
As part of the ‘Government’s Housing For All’ programme, a new annual tax called the Residential Zoned Land Tax (RZLT) was introduced under the Finance Act 2021, and is scheduled to come into practical effect on 1st February 2025.
As part of a broader approach to tackling the prevailing housing crisis, the intended purpose of the tax was to discourage the hoarding and profiting from undeveloped yet residentially zoned land, and to concurrently stimulate the building of residential properties on said sites.
As such, liability for this annually recurring tax (3% of the self-assessed market value of the land) is encountered should land be (a) Zoned for residential use, and (b) Serviced Land, i.e., it has access to essential services such as water supply, roads, drainage, sewers, and lighting.
However, an exemption (*) to pay the RZLT will apply should such land include residential properties which are already subject to Local Property Tax (LPT) †.
While initially (on 1st February 2024) the various planning authorities published a ‘draft’ map of such RZLT liable lands, latterly (commencing in early December 2024) there will be an onus for people to self-register. From there on a revised final RZLT map will be published annually by the local authorities, not later than 31st January each year, thereafter.
It is against these registers that Ellis & Ellis conduct Residential Zoned Land Tax (RZLT) Searches.
Why should the purchasing solicitor/ conveyancer search the Residential Zoned Land Tax (RZLT) Searches when investigating title in a property/ right/ interest?
Throughout the title examination process for a purchase, it falls upon the solicitor or conveyancer representing the buyer to authenticate and affirm the ownership of the property, rights, or interests being conveyed or reassigned on behalf of their client.
Although conducting a series of searches is crucial to verify a clear title before completing a sale, it’s equally vital for those legal representatives to guarantee that their client isn’t inheriting any underlying issues that could potentially undermine their rights, devalue the property, or impose limitations on its use.
Considering that a purchaser might acquire land for future development or as a long-term investment, the presence of a tax obligation such as Residential Zoned Land Tax (RZLT) could influence the commercial decision-making process.
It may also require a purchaser to examine the financial impacts of any exemption, abatements (i.e. reduction/ mitigation) or deferral provisions on which the seller may have relied before a purchase might proceed but might become liable to the new landowner.
Secondly, if buyers require financing from a lending institution, the buyer’s solicitor is also obligated under their commitment to provide a clear and marketable title for the lender.
Consequently, the possibility of a property being subjected to an unexpected tax burden could also undermine the commercial considerations that formed the basis of the lending institution’s initial decision.
How to request a search for Residential Zoned Land Tax (RZLT) Searches?
Typically, searches for Residential Zoned Land Tax (RZLT) liability are conducted on the records maintained by the Local Authority planning sections.
However, requests for Residential Zoned Land Tax (RZLT) searches are outside of Ellis & Ellis’ standard planning search report contents. As such RZLT search requests are usually conducted as an addendum to a planning request.
So, similar to a planning search request, a description of the premises and an up-to-date Ordnance Survey map with the area of interest marked is required (if not already supplied as part of a planning search).
What details are recorded on an ‘Residential Zoned Land Tax (RZLT) Search?
The report header will clearly state if the searched address/ area is currently liable for RZLT, and if so, identify one of the various types of RZLT zoning that may apply as follows: –
- Residential
- Residential proposed to be excluded.
- Residential proposed to be included.
- Mixed Use
- Mixed Use proposed to be excluded.
- Mixed Use proposed to be included.
Notes:
(*) Other criteria for exemption for the RZLT tax include (but are not limited to) the following: –
- ‘Residentially Zoned’ agricultural land that is not serviced might be open to being challenged for this tax liability.
- Residential dwellings and their gardens which, although included in the residential zoned land tax maps, will not be liable to RZLT,
- Certain infrastructure or facilities including utilities, transport, and facilities for social, community or recreational purposes,
- Land affected in physical condition by considerations which may impact the ability to provide housing on the land.
- A site which is designated as a derelict site and liable for the Derelict Sites Levy,
- Where land is zoned primarily for residential use, any rateable premises used by a business which provides services to the local residents, such as a local shop, and
- Where land is zoned as suitable for a mixture of residential and other uses, only land that is ‘vacant or idle’ will only be included within the scope of the tax. Land is vacant or idle where it is reasonable to consider the land is not integral to the operation of a business carried out on or beside it.
- Where land is subject to a contractual obligation that precludes the owner from developing it, and that contract was entered into prior to 1 January 2022, the owner may claim an exemption from RZLT for the period of the contract once certain conditions are met.
(†) Existing residential property may appear on local authority maps prepared for the purposes of RZLT. Nonetheless, if such property is excluded from the scope of the tax, on the basis that it is subject to LPT, owners are required to register for RZLT where the gardens/yards of the property exceed 0.4047 hectares (1 acre)
Use a trusted Law Search provider
Given the commercial significance of either not carrying out a Residential Zoned Land Tax (RZLT) Search at all, or worse, conducting an insufficient or flawed RZLT search; it is imperative that purchasing solicitors/ conveyancers use a dependable law search provider such as Ellis & Ellis.
With our fast and easy-to-use ordering platform at www.ellis.ie , over 130 years of expert know-how, and a terrific after-sales experience, we provide clients with an expert searching service.
For additional peace of mind Ellis & Ellis provide Professional Indemnity Cover of €10 million.
Why not join the 1000’s of users who trust Ellis & Ellis to deliver them a competitive edge?
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