Simon Harris confirms councils must pay residential zoned land tax on own housing land
The Wicklow PeopleFinance Minister and Wicklow TD Simon Harris has confirmed that local authorities will not receive any exemption from the Residential Zoned Land Tax (RZLT), a decision that places Wicklow County Council under direct financial pressure as one of the largest holders of undeveloped residential land in the State.
In a written reply to a query from fellow Fine Gael Wicklow TD Edward Timmins, the Tánaiste said the legislation “does not provide for a specific exemption for local authorities”, meaning councils must pay the tax on any land they themselves zoned for housing and provided with services.
RZLT is charged at 3pc of market value annually. It first fell due on February 1, 2025, and the 2026 liability was payable by May 23 this year.
Deputy Timmins had called for the government to urgently review the impact of the RZLT after Wicklow County Council was forced to pay €1 million under the measure.
County Wicklow has 388 hectares of residentially zoned and serviced land on the 2026 RZLT map, the third highest total for any county in Ireland.
While most of that land is privately owned, Wicklow County Council itself holds several strategic parcels across the county that have been zoned for housing for years but remain undeveloped.
Under Harris’s clarification, those sites now generate a tax bill unless development has commenced, or the council has secured a qualifying deferral through planning permission or rezoning.
The Tánaiste stressed that this is a deliberate move. RZLT was designed to activate development on serviced residential land, and the government’s position is that public bodies should not be treated differently from private landowners.
If a council has zoned land for housing and provided services, it should be delivering homes on that land. The tax is intended to ensure that councils cannot indefinitely hold strategic sites without progressing them.
The Tánaiste’s reply also highlights the timing rules that will bring more land into the tax net over time. Land that met the criteria in 2022 became taxable in 2025, and land that meets the criteria later becomes taxable in the third year after it qualifies.
This staggered approach means newly serviced parcels, or land rezoned under Wicklow’s ongoing development plan variation, will soon fall within scope.
Wicklow County Council is one of the 30 local authorities currently varying its plan to zone additional residential land, following the Housing Growth Requirements Guidelines issued in 2025. Any council owned land added through that process will eventually attract RZLT unless development begins.
The Department of Housing has already signalled that it expects councils to challenge landowners and accelerate delivery. Now, the Department of Finance is reinforcing that expectation by confirming that councils themselves will be financially penalised if they fail to activate their own land.
Harris said RZLT is “under regular review” and that any changes would be considered as part of the annual Budget and Finance Bill cycle.
However, the broader policy direction is toward tightening activation measures, not loosening them.
The Department of Housing has repeatedly described RZLT as a key tool to prevent land hoarding, and exempting councils would undermine that principle. There is no indication that an exemption is currently being considered.