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Land tax row: Green Party enters the boxing ring, but is it too late?

Greens are angry over plans to defer residential zoned land tax, moving from find-a-fudge mode to start-a-fight mode

Green Party TD Ossian Smyth: 'What we are not going to do is defer the tax for a year. I would never accept that. That is not going to happen.' Photograph: Nick Bradshaw for The Irish Times
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Jennifer Bray
Thu Aug 22 2024 - 19:15

The row between Fianna Fáil and the Green Party over plans to defer the residential zoned land tax (RZLT) has all the hallmarks of a silly-season spat which seems worse in public than it is in private.

Upon closer inspection, however, there is an ominous undercurrent developing between the two bigger parties and their smaller Coalition partner. In recent days, the Greens haven’t just raised concerns about the plans to defer the tax – they have emphatically said they will not accept it.

This is a budget battle, yes, but the Green Party is also laying down a more significant marker in advance of the general election. The party is moving from find-a-fudge mode to start-a-fight mode. Entering the boxing ring this week was Minister of State Ossian Smyth, who told RTÉ's Claire Byrne that he was “amazed” to read about the plans to defer the tax. On air, he sounded simultaneously angry and perplexed.

“What we are not going to do is defer the tax for a year. I would never accept that. That is not going to happen.”

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He said “most of the land is not farming land ... the majority of this land is not agricultural.” Party TD Steven Matthews went one step further and said it was “like hiding food in a famine”. The Greens have marched to the top of the hill and their message is that they are not for turning. That hardening of language at this current political juncture is no coincidence: there’s an election on the horizon, and strategists within the party fear it will be a difficult one.

[ ‘Like hiding food in a famine’: Coalition at war over plans to defer land tax ]

With a new leader, Roderic O’Gorman, in situ, the Greens are signalling that they will be a feistier force in the looming (and potentially quite short) Dáil term. In the meantime, a political fudge on the land tax issue will have to be found. Right now, the shape of that fix is unknown, but there is a growing consensus across the Coalition that it should not be allowed to become a bigger issue than it needs to be.

The tax was originally introduced to penalise people who were hoarding land during a housing crisis. To come within the scope of the RZLT, farmland must be both zoned for residential use and serviced. The aim is to ensure an appropriate supply of housing on zoned lands; all parties agree on this part.

The issue which has emerged is that many farmers are saying their land, which they use actively for farming, will unfairly come within the remit of the tax. Some of them say it will put them out of work. Others say they would have to sell their land because they cannot afford the tax, and this could end up being a boon for speculators who could snap up the land and sit on it.

[ Farmers should not be ‘penalised’ by residential zoned land tax, Taoiseach says ]

Other farmers say the tax would be multiples of what the land could economically return for them in a year. This issue has not come out of the blue, though. As part of Budget 2024, it was decided to extend the liability date of the tax by one year, from February 2024 to February 2025. This was to give those very landowners the opportunity to raise issues for the consideration of the local authority, including around zoning.

Landowners were given until the end of May to make dezoning requests. A senior Government source said: “It became clear around this time that many active farmers were still affected, and this is where the problem has arisen.” They said that some farmers who sought the dezoning of their lands have experienced difficulty doing so. It is not clear, however, how many farmers are actually affected by this.

What’s the solution? Amended primary legislation to exclude active farming land could be introduced, with a shorter deferral to take the heat out of the issue. But defining what is, or is not, “actively farmed” land could be a thornier task than some imagine.