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Lobbying in action: How property owners got the Government to defer the new tax on unused housing land

Records show large correspondence from representative bodies, accountancy firms and individuals objecting to tax

More than 200,000 people were at the National Ploughing Championships in Co Laois last September. One was a “fourth-generation dairy farmer”, who attended a Fine Gael event and then emailed Minister for Public Expenditure Paschal Donohoe to bemoan a new tax on property zoned for housing that was supposed to prevent land hoarding.

“I am following up on questions I put to you and the panel at the FG tent at yesterday’s ploughing match,” the farmer wrote. “Can the Minister give a commitment that genuine farmers will be exempt from this tax?”

When he was finance minister three years ago, Mr Donohoe introduced the residential zoned land tax (RZLT) in Budget 2022 in a bid to spur “the use of land for building homes”. With only one-sixth of residentially zoned land currently activated for housing, this has long been a priority for the Government.

The tax was a standout policy in the Housing for All masterplan, the aim being to galvanise housing supply by imposing costs on people for not developing land zoned residential.


Exemptions were sought by some of the biggest real estate investors in the State, among them developers Cairn, Glenveagh, Castlethorn, Quintain, O’Flynn Group, Hammerson, Hibernia, Kelland, Ardstone, Bovale and many others

But the move angered property owners, prompting thousands of them to seek exemptions from local authorities and hundreds of appeals to An Bord Pleanála when their demands were rejected.

Of 646 appeals determined by An Bord Pleanála, the local authority decision was confirmed in 453 cases and overturned in 133 cases. An Bord Pleanála amended a further 35 local authority decisions and 25 appeals were withdrawn or deemed invalid.

Exemptions were sought by some of the biggest real estate investors in the State, among them developers Cairn, Glenveagh, Castlethorn, Quintain, O’Flynn Group, Hammerson, Hibernia, Kelland, Ardstone, Bovale and many others. Companies controlled by billionaires JP McManus and John Malone also objected to the tax being levied on some of their property.

Although the RZLT was supposed to take force this month, Minister for Finance Michael McGrath deferred it for one year in Budget 2024 to allow a review of tax maps and “afford affected people with a further opportunity to engage with the process”.

The Department of Finance has said the tax remains “an important component of the pathway” to increasing new housing supply. If it is not deferred again, the annual charge will be set at 3 per cent of market value from February 1st 2025, imposing potentially large costs on owners.

Now internal files from the finance and housing departments show how the Government came under huge pressure from big business, farming and political interests to pull back from the tax in the months leading up to the October budget.

The records were released under the Freedom of Information Act, showing interventions from lobby groups such as the Irish Home Builders Association, Property Industry Ireland, the Irish Farmers’ Association and the Irish Creamery Milk Suppliers Association.

Pre-budget submissions from accountants Grant Thornton, PwC (PwC), KPMG and Deloitte also questioned the tax.

The Irish Home Builders Association, a division of the Construction Industry Federation with hundreds of members, said: “No lands should be included as subject to further taxation where the delay in the commencement or the ‘activation’ of the lands is outside the control of the builder.”

Property Industry Ireland, a division of employer group Ibec, said the tax would be applied where developers were doing everything in their power to bring sites forward. It called for a deferral of RZLT charges “from the moment of bona fide entry into the planning system.”

Noting meetings on the RZLT with Mr McGrath and his officials, the IFA said “many farmers are worried about their ability to even continue farming if this tax applies to them on their farmland.” The ICMSA said the tax should not apply where the owner showed they were “farming the land for more than five years.”

Grant Thornton said the tax in certain cases may have the opposite of the desired effect and “lead to a reduction in the supply of housing.” Similarly, PwC said the RZLT “can be disproportionate in limiting the delivery of large schemes”.

KPMG said the tax should “reflect the reality of the current planning system and the viability challenges faced by home builders”. Deloitte said amendments should be considered to ensure the RZLT was “not taxing those that are genuinely trying to advance developments but being prevented from doing so by reasons outside of their control”.

‘So once again, ye just make decisions in the Big Smoke but never look at the overall picture, talk about short-sighted and tunnel vision’

—  From an email of complaint about the land tax received by Michael McGrath

Dozens of other records were anonymised for privacy reasons. But they still cast light on protracted lobbying efforts behind the scenes that ran parallel to public applications for exemptions. The aim was to get ministers to change course on a tax Mr McGrath has cast as a “key pillar” of the response to the housing crisis.

Some submissions came from individual farmers such as the one who emailed Mr Donohoe after the ploughing event. “This tax is absolutely preposterous, or where do you expect us ordinary people to fund such taxes?” said a farmer in separate correspondence to Mr McGrath, Mr Donohoe and Minister for Housing Darragh O’Brien.

In an email to Mr McGrath’s secretary, another warned of a farmer backlash in the next election. “We are disgusted to think we live in such a state, that our forefathers fought so hard for, freedom of choice and freedom to own our own lands and to do with it what we so wish,” the email said. “So once again, ye just make decisions in the Big Smoke but never look at the overall picture, talk about short-sighted and tunnel vision.”

Other submissions went in at a higher level still, with files showing how senior ministers Norma Foley, Charlie McConalogue and Heather Humphreys and Minister of State Neale Richmond sent inquiries about the tax to Mr McGrath.

Mr O’Brien also wrote to Mr McGrath, seeking “any information” he could provide on a constituent’s question about “legislation” to exclude working farmland and farmyards from the tax. Mr McGrath’s secretary replied to the housing minister saying farmland “must be both zoned for residential use and serviced” to fall within the scope of the RZLT. Mr McGrath received correspondence about the same question from Mr Donohoe’s office.

Another farmer wrote to Taoiseach Leo Varadkar, saying a “small field” would be subject to the tax: “I am not a developer and I do not have the means to develop it at the moment. I am also not in a position to sell the land.”

The political questions did not stop there, with correspondence to the finance or housing ministers from Fianna Fáil TDs Cathal Crowe, Jackie Cahill, Jennifer Murnane O’Connor and Fine Gael TDs Bernard Durkan, Ciarán Cannon and Frank Feighan. Independent TD Danny Healy-Rae wrote separately to Mr Varadkar and Mr O’Brien.

In addition, the county councils in Monaghan, Leitrim, Mayo, Donegal, Clare, Galway and Limerick city and county sent correspondence to the finance or housing ministers noting resolutions on the tax and concerns about its impact.

Deferral of the tax gave owners another opportunity to make submissions this year on the zoning of their land. They are unlikely to change their tune.

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