Press releases

Budget 2022: Deloitte comments on introduction of a zoned land tax

A key announcement from the Minister in his Budget Speech focussed on the introduction of a zoned land tax.

Commenting on the announcement, Shane Wallace, Tax Partner, Deloitte said:

The real estate market has been a topic of discussion for some time now, with the cost of materials and delays caused by COVID-19 stalling construction and increasing overheads. The increased focus on housing and the property market has been further heightened by the announcement from the Minister in his Budget address of a zoned land tax.

The introduction of the zoned land tax may be of concern to some market participants who want to build on land held but face difficulties with the current planning system of progressing such developments. It is hoped that the detail of the scheme will take account of such issues so that those who are trying to make progress are not unduly penalised. It will be important also that the tax does not result in the unintended consequence of placing upwards pricing pressure on the cost of new units over the medium term. Bringing land from zoning to planning swiftly is the real key to unlocking the supply so that developers can get on site to build.

Wallace concluded:

With a two-year lead in time for land zoned prior to January 2022, and a three year lead in time for land zoned after January 2022, it will give time to review the exact technical detail of the tax to ensure that it is workable. The tax of 3% based on the market value of the land has been described by the Minister as having the primary objective of increasing the supply of residential accommodation to the market, rather than to act as a revenue raising measure. Such a measure recognises the pressure that the residential accommodation market now finds itself under.

Ends


Issued by Murray on behalf of Deloitte Ireland

For Further Information Please Contact

Orna Clarke
Murray
01 498 0300
087 677 0360
oclarke@murraygroup.ie

Claire Quinn
Deloitte
087 977 7783
cquinn@deloitte.ie

About Deloitte

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In Ireland, Deloitte has approximately 3,000 people providing audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience and insight to collaborate with clients so they can move forward with confidence.

In this press release references to Deloitte are references to Deloitte Ireland LLP. The information contained in this press release is correct at the time of going to press. Deloitte Ireland LLP is the Ireland affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms.

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