Sir, – I agree with Prof Michelle Norris (Letters, August 1st) that actively farmed land should remain subject to the residential zoned land tax (RZLT), but there is an issue of proportionality. In many developments, land costs and developer’s profit form roughly equal proportions of the final sale value of a development – around 12 per cent to 15 per cent in both cases. If prices stay the same, developers may thus see their eventual profit reduced by 3 per cent for each year in which they do not develop.
Farmers are in a different position. If their land has a development value of, say, €100,000 an acre, the €3,000 annual charge will be more than 100 per cent of farm income in almost all cases. They are being given a strong push to sell as quickly as possible, while developers are being given a mild nudge not to hang around too long.
My fear is this will lead to too many hard cases, partly because some land is not immediately saleable, and some zoning does not accurately judge market potential. Partial or total abandonment of the measure could result, perhaps in the short term, perhaps when the next economic downturn eases, pressure on the housing market.
We need reforms which not only are implemented, but stay implemented.
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A general exemption for active farmers would indeed be wide open to abuse.
However, if a reduced rate applied to current owners who could show they had actively farmed the land in question since 2015 (when the first version of this levy was introduced), with clearly defined tests as to what constituted an active farmer, the risk of of abuse would be reduced, and the measure more likely to survive. The reduced rate could be set so such farmers still had a worthwhile incentive to make land available for development, but were not compelled to do so more or less immediately.
The 2015 version of this levy was a particularly bad example of legislation made ineffective by a multiplicity of loopholes and exemptions, and a 2018 amendment exempting agricultural land.
Hopefully, it might be possible to steer a middle course this time. – Yours, etc,
Dr NICHOLAS MANSERGH, MIPI
Cork.