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RZLT Challenges and New Landlord/Tenant Rules

The controversial Residential Zoned Land Tax (RZLT) is proving to be a bigger headache for the State than previously expected, with Dublin City University (DCU) amongst the latest landowners to challenge findings by An Bord Pleanála that their properties are liable for the new tax, which is set to come into force in 2025. 

The current High Court judicial review actions challenge decisions taken by the Board to support or uphold the original findings by various local authorities to include the properties on maps of sites where the so-called ‘land hoarding tax’ applies. (It is worth pointing out that developer Michael O’Flynn has publicly called for a recognition of the distinction between land hoarding and land-banking, he broadly supports taxation of the former.)

According to a report in The Irish Times this week, one of the private property developers currently taking three separate challenges in Fingal claims the sections of the Taxes Consolidation Act underpinning the RZLT are “unconstitutional and contrary to the European Convention on Human Rights”, on the basis that they fail to protect – and amount to an unjust attack on – the property rights of the company. This will be a particularly interesting case to watch as the developer wants the court to declare the relevant section of the Taxes Consolidation Act, as amended to introduce the RZLT, constitutionally invalid.

As for DCU, the university has now obtained court permission to challenge the Board’s decision to allow two sites in Glasnevin to be included on the map of lands eligible for RZLT, which would incur a liability of 3 percent of the land’s market value. This case is expected before the High Court in December.

Residential Tenancies (Right to Purchase) Bill
Also this week, the legislation that requires landlords who are selling up to give their tenant the option to buy was due before Cabinet. The new statutory right to purchase for tenants is covered under the Residential Tenancies (Right to Purchase) Bill, which sets out that where a Notice of Termination is served on the basis of an intended sale, the landlord will be obliged to simultaneously invite their tenant to make a bid to purchase the property within 90 days. Critically, after the 90-day period, landlords will be further obliged to invite any tenant who made an unsuccessful bid during the initial 90-day period to make a further bid to purchase the property at a price equal to the final sales price that the landlord is willing to agree/accept on the open market. If the tenant matches the final price, the landlord will be obliged to accept the offer. 

According to a recent article, once the new legislation has been signed off on by Cabinet, it will be published, before going to pre-legislative scrutiny and through the Houses of the Oireachtas. While it is likely to be some time before the legislation is enacted, it appears inevitable at this stage.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group