RZLT: One Year On - Lessons for Landowners and Developers

As 2025 draws to a close, the Residential Zoned Land Tax (RZLT) continues to influence how Ireland manages development land. The government’s new housing action plan, Delivering Homes, Building Communities 2025–2030, reinforces its commitment to enforcing RZLT as a core tool to “penalise land hoarding and ensure zoned and serviced land is developed”.

Originally introduced under the Government’s Housing for All plan, RZLT applies an annual 3% charge to serviced land zoned for residential use. Its intent is clear: to motivate landowners to activate development potential rather than hold strategically zoned sites. 

The land activation measure, which aims to encourage the development of zoned and serviced land for residential development, is beginning to shape planning, pricing and investment decisions. 

More than 52,000 hectares were identified on the initial 2025 draft maps, underlining the breadth of its reach. By Budget 2026, almost 2,000 RZLT returns have been filed, with liabilities approaching €40 million already paid. Over 500 returns claimed a tax deferral, typically where residential or commercial development had commenced or a planning appeal was in progress. 

The government has also pointed to signs that the tax is having its desired impact. In 2024, the volume of land sold increased by almost 30%, while the median price per acre of residentially zoned land fell by 6% compared with 2023.

With several refinements introduced through Finance Bill 2025, landowners, developers and investors should take note of the key changes now shaping RZLT compliance and strategy.

RZLT in action

RZLT is self-assessed, putting the onus on landowners to review maps published annually by local authorities on 31 January to determine whether their land falls within scope. No tax is payable until three years after the land first becomes zoned for residential purposes and is serviced. 

However, planning is essential to avoid falling within the scope of RZLT, missing filing deadlines, or forfeiting the opportunity to claim a deferral, exemption or exclusion. While lands subject to LPT are excluded from RZLT, landowners must still register for RZLT and file a return if their gardens or yards exceed 0.4 hectares, even though the tax will not be applicable.

Commercial property owners and farmers should not assume automatic exemption. Land used for commercial purposes or active farming may still be zoned residential—particularly in areas near towns and villages. 

While the Government has indicated that active farmland should not be subject to RZLT, the onus is on the landowner to seek rezoning to reflect its current use. Similarly, commercial property owners paying rates may need to seek exclusion from the maps to confirm the land’s true economic use. 

The penalties associated with non-compliance, particularly the surcharges for undervaluation and late filing of returns, are significant. Landowners are responsible for determining and declaring this value in their annual RZLT return, but Revenue can determine that the land has been undervalued, either deliberately or through negligence, and apply a surcharge of up to 30% of the RZLT due. 

This surcharge is in addition to any late filing penalties, which range from 10% to 30% of the liability, depending on the length of time the return is left unfiled.

Industry impact

RZLT compliance is becoming a consideration in property transactions and financing decisions:

• Property sales: Sites cannot be sold unless RZLT compliance is confirmed. Unpaid taxes and surcharges, such as those arising from undervaluation or missed filings, remain attached to the land. Tax advisers must investigate RZLT status as part of due diligence.
• Loan refinancing: Financial institutions may require evidence of RZLT compliance before approving refinancing.
• Planning and development: Developers must factor RZLT obligations into project feasibility assessments such as acquisitions, disposals and development timelines.

What has changed for 2026 

The Finance Bill 2025 introduced targeted changes to how RZLT operates: 

• Rezoning opportunity and exemption: Landowners whose land appears on the revised map (31 January 2026) can request rezoning by 1 April 2026. Where such a request is made, an exemption from the 2026 liability may apply.
• Planning appeals: The Bill updates the deferral system, allowing for a full exemption while an appeal is underway and aligning treatment with judicial reviews. The exemption applies from the grant of planning permission and lasts for the duration of the appeal. This is significant, as a deferral falls away when a site is being sold, and no sale can take place without filing a return and paying the deferred tax.
• Recent planning permissions: RZLT arising within 12 months of a planning grant can be deferred, with payment due the later of 12 months after the grant or the return date.

The upshot for landowners is that although the deadline for seeking exclusion for 2026 has passed, they can still apply to have land rezoned to reflect genuine economic activity and, in doing so, avail of an RZLT exemption for 2026.

Revised maps for 2026 will be published on 31 January 2026, and draft maps for 2027 on 1 February 2026. The deadline for rezoning or exclusion requests is 1 April 2026.

Looking Ahead

The direction of travel is clear: proactive engagement with your tax advisers is better than reactive correction.

For investors and developers, understanding the tax’s commercial ripple effects on valuation, financing, and project timing will be central to considerations ahead in 2026.