Call for urgent review as Wicklow council hit with €1m residential zoned land tax bill
The Wicklow PeopleA Wicklow TD has called for the government to urgently review the impact of the Residential Zoned Land Tax (RZLT) on local authorities after Wicklow County Council was forced to pay €1 million under the measure, a cost he says is undermining the county’s ability to deliver housing and essential services.
Raising the issue in the Dáil, Deputy Edward Timmins said the tax was never intended to apply to local authorities and is now punishing councils that acted responsibly by purchasing and zoning land for future housing. He warned that the financial hit to Wicklow County Council is already affecting services and could jeopardise the county’s ability to meet its housing targets.
“I want to raise the issue of the residential zoned land tax and how it applies to county councils,” Deputy Timmins told the Taoiseach.
“Councils were originally led to believe that they would not have to pay this tax. In Wicklow in the past year, the council paid €1 million in residential zoned land tax, which impacts on reducing services in County Wicklow.”
The RZLT, introduced in the Finance Act 2021, was designed to encourage the development of zoned and serviced land by imposing a 3pc annual tax on its market value. The measure was aimed at private landowners holding onto land suitable for housing. However, the legislation did not include an exemption for local authorities, meaning councils that own residential‑zoned land are now liable for the tax.
Deputy Timmins said this outcome contradicts the original intention of the policy and penalises counties like Wicklow that have taken a proactive approach to housing delivery.
“This does not work correctly because it penalises forward‑looking councils like Wicklow that purchased land and had lands zoned,” he said. “They are now being penalised for doing that.”
He argued that the tax is creating a disincentive for councils to acquire land for future housing projects, directly undermining the Government’s own housing strategy.
“I ask that this be reviewed,” he said.
“Councils were originally told that it would not apply to them. I ask that the residential zoned land tax be abolished for county councils because it is encouraging them not to purchase land and not to hit their housing targets. It contradicts everything we are trying to do to improve housing.”
Wicklow County Council has been particularly affected due to its long standing practice of purchasing land early to ensure a pipeline of sites for social and affordable housing.
Much of this land is zoned for residential use and is serviced or capable of being serviced, placing it squarely within the scope of the RZLT. The €1 million payment represents a significant portion of the council’s annual budget and has raised concerns about the impact on housing delivery, infrastructure projects, and day to day services.
In response to Deputy Timmins, the Taoiseach said he would ask Deputy Timmins’s constituency colleague Tánaiste and Finance Minister Simon Harris to examine the matter and provide further information.
Tanaiste Simon Harris speaks to the media as he arrives for a Cabinet meeting at Government Buildings in Dublin. Picture date: Tuesday May 26, 2026. © PA Radar
The issue has been gaining attention nationally as other councils also report unexpected tax liabilities. However, Wicklow’s case has become one of the most prominent examples of how the tax is affecting local authorities that hold significant amounts of residential‑zoned land for future development.
Deputy Timmins said the situation must be addressed before it causes long‑term damage to local authority housing plans. He warned that unless the government intervenes, councils will be discouraged from acquiring land, slowing down the delivery of social and affordable homes and undermining the objectives of Housing for All.
“It is encouraging them not to purchase land and not to hit their housing targets,” he said. “It contradicts everything we are trying to do to improve housing.”
The Department of Finance has not yet indicated whether it will consider legislative changes or exemptions for local authorities. As it stands, Wicklow County Council remains liable for the tax, and the issue is expected to remain a point of contention as budget pressures mount.