Landowners Tax Advisors

Residential Zoned Land Tax (RZLT), Finance Act 2024, Landowners tax, Self assessment tax

As you already know, Residential Zoned Land Tax (RZLT) was introduced by Finance Act 2021.  In case you didn’t, it’s an annual self-assessment tax calculated at 3% of the market value of applicable land, with pay and file obligations levied on the landowners.  While it was first introduced in 2022, the first year that a tax liability is actually payable is 2025. The Revenue Commissioners confirmed that the RZLT registration portal is scheduled to go live on 27^th January 2025.

What is the filing date?

The due date for the landowners to file a Return and pay the relevant tax is on or before 23^rd May 2025. Going forward, an annual tax return must be submitted to Revenue, and any tax liability paid by 23^rd May every year. The landowner is required to determine and declare the market value of the land to Revenue.  The revised final maps are due to be published by local authorities by 31^st January 2025.

What does RZLT apply to?

RZLT applies to land which was zoned as being suitable for residential development and adequately serviced since 1st January 2022, and on which development has not commenced up to 1st February 2025.  Finance Act 2024 introduced an exemption from RZLT in situations where legal proceedings are ongoing.

How do you access the RZLT portal?       

The RZLT portal will be available on ROS or MyAccount by clicking the My Services and then clicking Manage Residential Zoned Land Tax in Other Services.  Once registered, Revenue will assign a unique site identification number which will take up to one working day.  Receipt of Filing confirmation in the ROS Inbox will require an overnight update.

For further information, please click:

Revenue eBrief No. 018/25

Revenue eBrief No. 019/25

Accounts Advice Centre is a Tax Consultancy firm with expertise in all property related taxes. If you would like to make an appointment, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Gift and Inheritance Tax. Capital Acquisitions Tax. Dwelling House Exemption. CAT Reliefs and Exemptions

Everyone is aware that significant changes were introduced in the 2016 Budget but have you thought what they might mean for you?  From 25th December 2016, the Dwelling House Exemption from CAT (Capital Acquisitions Tax) will apply (i) to inheritances and (ii) gifts to a dependent relative.   Subject to certain exceptions, the inherited property must have been the principal place of residence of the deceased person at the date of death.  This requirement, however, will be relaxed in situations where the deceased person was required to leave their home, prior to the date of death, as a result of ill health.

Situation prior to 25th December 2016

Prior to 25^th December 2016, Section 86 CATCA 2003 provided a means of passing on a property to the next generation, either by gift or inheritance, in a tax free manner.

The exemption from Capital Acquisitions Tax for a gift or inheritance of a dwelling house or part of a dwelling house applied if the following conditions were met:

1. the donee/successor/beneficiary who received the gift or inheritance must have continuously occupied the dwelling house as their sole or main residence throughout a period of three years immediately up to the date of the benefit or
2. in circumstances where the dwelling house replaced another property, the donee/successor/beneficiary must have occupied the property as their only or main residence for a period of three out of the four years immediately before the date of the benefit  and
3. the donee/successor/beneficiary must not at the date of the gift/inheritance have been beneficially entitled to any other dwelling house or interest in any other dwelling house and
4. in circumstances where the donee/successor was aged under fifty five years, he/she must have continued to occupy the dwelling house as their sole or main residence for six years beginning on the date of the gift or inheritance.

Capital Acquisitions Tax Situation from 25^th December 2016

1. The Dwelling House Relief is available for inheritances of a dwelling house or part of a dwelling house only.  It is no longer available for gifts or gifts which convert to inheritances in circumstances where the donor dies within two years of the date of the gift.
2. The donor must have occupied the dwelling house as their sole or main residence at the date of his/her death. Please be aware that this requirement will be relaxed in situations where the deceased person could not remain in the dwelling house due to mental or physical infirmity. In other words if that individual requires specialist care in, say, a nursing home and as a result, has to leave their home, then they will be deemed to continue to occupy the property during that period.
3. The beneficiary/successor must have occupied the dwelling house as their sole or main residence for a continuous period of three years preceding the date of the inheritance. In other words, the house must be occupied by both the person making the gift at the date of death and the beneficiary receiving the gift at the date of the inheritance. Please be aware that this requirement does not apply in the case of a gift of a dwelling house to a “Dependant Relative.”
4.  The beneficiary/successor must not have an interest in any other dwelling house or part of a dwelling house at the date of the inheritance and
5.  The beneficiary/successor must continue to occupy the dwelling house as his/her main or sole residence for six years from the date of the inheritance.   Please be aware that this requirement will be relaxed in situations where the beneficiary/successor cannot remain in the dwelling house due to mental or physical infirmity or because the terms of their employment requires them to live elsewhere.
6.  The Dwelling House Relief will however be available on a gift of a dwelling house which is made to a “Dependant Relative.”   This is defined as a direct relative of the person making the gift or their spouse/ civil partner, and who is permanently and totally incapacitated by reason of mental or physical infirmity or is over the age of sixty five years.

What does this mean?

The amendment to Section 86 CATCA 2003 (Exemption relating to certain dwellings) has removed a valuable tax planning opportunity and will lead to unforeseen Capital Acquisitions Tax liabilities for individuals who receive gifts.

To most it seems like an excessive way of addressing the problem of wealthy families using this exemption as a means of transferring property to the next generation tax free.   For many families in Ireland the “Dwelling House Relief” was used by parents to help their children get on to the property ladder.   Some, however, welcome this amendment stating that it will ensure that family members who genuinely want to live with and care for elderly parents will inherit the family home tax free providing the conditions are met.

It is also important to keep in mind that since the conditions for this Relief are based on mental or physical infirmity then medical proof will be required to avoid a claw-back of the relief.

 In summary

1. Section 86 CATCA 2003 Dwelling House Relief is only available for inheritances unless a gift of a dwelling house is taken by a Dependant Relative who is permanently or totally incapacitated or aged over sixty five years.
2. The age at which a beneficiary/successor can take a property without being liable to the claw-back provisions has been increased from fifty five years to sixty six years.
3. The house must be occupied by both the disponer and the beneficiary at the date of the inheritance except where the property was gifted to a dependent relative.
4. The property is the only residential property that the beneficiary/successor is beneficially entitled to.

For further information, please click:

http://www.revenue.ie/en/practitioner/ebrief/2017/no-042017.html

For all your Irish or cross-border gift or inheritance concerns under Inheritance Tax, Gift Tax, Estate Tax and Capital Acquisitions Tax,  please contact us on queries@accountsadvicecentre.ie.

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Landlord Taxes, Rental Expenses, Property Tax Deductions

The High Court decision in Revenue Commissioners v Thomas Collins has just been published.  It states that contrary to Revenue’s position, the NPPR (Non Principal Private Residence) charge was in fact an “allowable” expense against rental profits under Section 97(2) TCA 1997.

What was the NPPR Charge?

The NPPR (Non Principal Private Residence) charge was an annual charge of €200.  It was implemented by the Local Government (Charges) Act 2009, as amended by the Local Government (Household Charge) Act 2011.

What does it relate to?

It related to all residential property situated in Ireland which was not used as the owner’s sole or principal residence from 2009 to 2013.

Examples of the type of residential properties liable for the NPPR charge were:

• private rented properties including houses, maisonettes, flats, apartments or bedsits.

• vacant properties – This definition excluded new but unsold residences in situations where they had never been used as a dwelling houses but instead were deemed to be part of the trading stock of a business.

• holiday homes or second homes.

Previous Tax Treatment of NPPR

Irish Income Tax is calculated on the net amount of rents received or rental profits.  In other words Income Tax is charged on the gross rents received less any allowable expenses, as specified in the Taxes Consolidation Act 1997.

The main deductible expenses include:

• Interest on money borrowed to purchase, repair or improve the property,

• Any rent payable by the landlord in relation to a sub-lease,

• The cost to the landlord of providing any goods or services to the tenant,

• The cost to the landlord of insurance, repairs & maintenance, property management fees, etc.,

• Local Authority Rates where relevant.

For details of allowable rental expenses, please visit www.revenue.ie/en/tax/it/leaflets/it70.html

What was the Irish Revenue Authorities and the Department of Finance’s stance prior to this ruling?

That the payment of the NPPR charge for residential properties was NOT an allowable deduction in calculating Income Tax on the rental profits.

Effect of this Ruling

If this High Court decision is not overturned, then it could result in a repayment of taxes overpaid.

There is a time limit for claiming refunds of tax overpaid.

All claims for tax refunds must be made within four years of the end of the year to which the claim relates.

If you are a landlord of rented residential property in Ireland seeking tax advice or looking to regularise your tax affairs, and wish to deal with a Property Taxes Specialist please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.