Anomalies to be resolved to ease tax burdens for Farmers and Landowners

Mayo’s Fine Gael TD, Alan Dillon welcomes an imminent directive to local councils that will permit de-zoning of farmland, thus relieving farmers from the burden of a forthcoming land tax and further anomalies that have arisen in respect to landowners who are actively selling their serviced land.

This decision responds to Deputy Dillon calls from landowners and farmers to exempt both farmland and properties currently on sale from the residential zoned land tax, set to be implemented next year.

This new 3% tax has been designed to incentivise the use of idle land zoned for housing, with the aim of discouraging land hoarding and boosting housing availability.

Given that residential zoned land holds a much higher value than agricultural land, farmers and landowners have raised serious concerns about the impending substantial tax liabilities. Deputy Dillon highlighted the predicament of a landowner whose land, zoned for medium density development by Mayo County Council, is fully serviced and has been on the market for the past three years. Despite actively trying to sell this property, which received planning permission in 2021, the landowner is liable for the full 3% tax.

“Farmers desiring to change their land use from residential to agricultural must submit de-zoning applications to local councils. However, some of these applications have been turned down. In response, the Department of Housing will soon instruct councils to facilitate such rezoning” according to Deputy Dillon.

This instruction will apply exclusively to farmland zoned as residential and serviced by the local authority, meaning it is connected to a water and electricity supply. Farmers not intending to use their land for housing can apply for rezoning. The ultimate decision to de-zone rests with local councils.

Taoiseach Leo Varadkar recently revealed to the Dáil that around 200 de-zoning applications from landowners had been rejected by An Bord Pleanála. He acknowledged the Government’s efforts to exempt farmland from the tax, particularly in cases where owners have attempted to de-zone.

Varadkar further disclosed discussions about this issue with the Ministers for Housing, Finance, and Public Expenditure. Recognising the anomalies that have arisen, he confirmed the Government’s intention to rectify the situation, hinting that a change in primary legislation may be needed.

However, it is suggested that this adjustment may not require changes to primary legislation but will instead be communicated to local authorities by the Department of Housing.

Deputy Dillon previously raised this issue in the Dáil and sought clarification from both the Minister of Finance and the Taoiseach. He states, ” those actively farming and owning land on the market should not bear the burden of this tax.” He also highlighted the considerable stress this situation is imposing on many farmers he is familiar with. The Mayo TD emphasized, ” Land that has seen generations of farming activity should remain dedicated to agriculture.”