In Practice

TAKE-AWAYS FROM THE PRA ANNUAL REPORT 2021

RESIDENTIAL ZONED LAND TAX (RZLT)

The Property Registration Authority (PRA) recently published its Annual Report for 2021. There are some interesting statistics contained. Here is a flavour of the main take-aways from this Report.

Despite the challenges presented by Covid-19 the PRA has reported an increase in productivity noting the following: • In 2021 the PRA received 199,585 applications for registration; the correlative output amounted to 180,033 applications which illustrated a large increase of 30,727 additional applications completed in 2021 in comparison with the previous year. • While there was an increase in the intake and output of applications for registration from 2020 to 2021 (14% and 23% respectively), the net output for applications for registration also improved. • In terms of applications for registration that are still in progress the figure is quite high, 99,325 applications were ongoing at the end of 2021, highlighting a 23% increase compared to the figure at the end of 2020.

These figures suggest that there is a backlog of applications for registration from previous years leading to a larger number of work in progress applications. • The number of First Registrations requiring an examination of title rose by 33% in 2021.

This raises the question of whether this increase is due to fewer solicitors certifying title or if it is perhaps reflective of rising residential property prices. Furthermore, the output of Examiners Cases rose from 4,819 in 2020 to 8,054 in 2021 while the amount of Examiners Cases that were a work in progress dropped from 11,676 at the end of 2020 to 9,034 at the end of 2021.

These figures reflect a substantial increase in productivity and a reduction in the backlog in First Registrations requiring an examination of title. • Counter-Fraud Initiatives remained central to the PRA’s work in 2021 and several

Information and Awareness Initiatives were run to raise awareness about fraud prevention methods to protect both the PRA and property owners. These included a particular focus on the Property Alert Service available on landdirect.ie. This service gives the owners of registered property the ability to be notified by email or text when an application has been lodged with the PRA to update the

Land Register, therefore granting further protection against fraudulent applications. • The PRA also provided the following breakdown regarding Service Delivery

Targets. The PRA achieved 99% of its target to have 100% of electronic applications for registration completed within 10 working days. In addition to fulfilling an objective to issue 95% of copy folios and title plans within 24 hours of an application. However, it is interesting to note the absence of a target regarding the issuing of copy Instruments which according to many can often take a period of 12 to 16 weeks. DSBA Property Committee

The DSBA Property Committee wishes to draw practitioners’ attention to the recently introduced provisions of the Finance Act 2021 and some action points to follow up with clients.

What type of land does it apply to?

• It applies to land which on or after 1 January 2022 is zoned as being suitable solely or primarily for residential use (and serviced for development as such). • Where agricultural land meets the above criteria, owners of agricultural land will be liable for RZLT. • Existing residential properties may appear on zoned land maps as published by each local authority but they are excluded from the scope of RZLT but an obligation to register with Revenue Commissioners arises where the curtilage of the residential property is greater than 0.4047ha (1 acre).

What types of properties are excluded from RZLT?

• Residential dwellings and gardens. • Facilities for utilities, social, community or recreational purposes. • Land which has a physical condition which may impact the ability to provide housing on the land. • Land designated as a Derelict Site under

Derelict Sites Act 1990. • Land which although zoned residential is a rateable business and provides services to local residents e.g a neighbourhood shop • Mixed use land – only vacant or idle land is included within the scope of RZLT. What is the rate of RZLT?

RZLT will apply annually at a rate of 3% of the market value of the land. The land will be revalued every 3 years from the initial valuation date. This is a self-assessment tax so like Local Property Tax the property owner determines the market value. Surcharges may apply if the land is later found to be undervalued. RZLT is administered by Revenue Commissioners and not the local authority. Note Vacant Site Levy continues to apply (note this is at a rate of 7% of market value) but it will be replaced with RZLT in due course. Any unpaid Vacant Site Levy remains a charge on the property to be collected by the local authority.

When will a landowner be first liable to pay RZLT?

• Due 1 February 2024 and payable in May 2024 for applicable land as of January 2022. • Where land becomes zoned and serviced in subsequent years then RZLT will be chargeable in the third year after the year in which it comes within scope of RZLT. • Where land liable to RZLT is under appeal to An Bord Pleanála, RZLT may be deferred pending the outcome of an appeal. This only applies where the land is subject to a third party appeal. If the appeal overturns the grant of planning permission then any deferred tax is due for payment. • Where land subject to an appeal is sold prior to outcome of the appeal, the landowner must pay any tax which has been deferred prior to the completion of the sale. Action Steps for Clients

• Now - Review residential zoned land maps on local authority websites to check if land has been designated as within scope of RZLT. • On or prior to 1 January 2023 – make submissions to local authority regarding removal of land from the RZLT maps where it is believed it has been incorrectly included. • Late 2023 – obligation to register a residential property on lands of more than 0.4047ha (1 acre) where the property has been designated for RZLT (even though RZLT not payable).

Right of Appeal

• On 1 April 2023 the local authorities will write to landowners notifying them of removal or retention from the RZLT maps. A landowner may appeal the decision to An Bord Pleanála on or prior to 1 May 2023. • There is a further round of submissions/ notifications/right of appeal for properties included in supplemental maps published in

May 2023.

When does RZLT cease to apply?

• When homes are developed on site and completed; or • Where land is zoned for mixed use – when a non residential development commences construction; or • Where the zoning is changed such that it is no longer suitable for residential development; or • Where after publication of final map – the land becomes unsuitable for residential development. Roisin Bennett DSBA Property Committee

New DSBA Council 2022/2023: Front row (left to right): Joan Doran, Niall Cawley, DSBA President Susan Martin, Matthew Kenny, Paul Ryan. Back row (left to right): Eimear O’Doherty, Ciara O’Kennedy, outgoing DSBA President Diego Gallagher, Patrick Longworth, Jessica Hickey, Stefan O’Connor, Ciara Hallinan, Gerard O’Connell, Avril Mangan, Killian O’Reilly The AGM of the Dublin Solicitors Bar Association took place at the Westbury Hotel on the 26th October 2022. The AGM was extremely well attended as it signalled the end of Diego Gallagher’s successful year as President.

Susan Martin took over the reigns at the helm of the DSBA with Matthew Kenny installed as Vice President of the DSBA.

Stefan O’Connor was newly elected as a DSBA Council member.

Left: Stefan O’Connor, Susan Martin, Diego Gallagher and Matthew Kenny Far left: DSBA President Susan Martin and Sonia McEntee

Right: Seona Ni Mhurchu, Diego Gallagher and Paul Ryan Far right: Outgoing DSBA President Diego Gallagher

Left: Morette Kinsella, DSBA President Susan Martin and Bernadette Cahill Far left: Outgoing DSBA President Diego Gallagher and Helen Sheehy

Left to right: Newly elected DSBA President Susan Martin addresses the AGM Far left: Niall Cawley and Ciara O’Kennedy

Left: Ciara Hallinan and Susan Martin Far left: Emma McLoughlin and Elaine Given

Right: Matthew Kenny and Tom Menton Far right: Gerard O’Connell and Patrick Longworth

Left: Richard Hammond SC and DSBA President Susan Martin Far left: Brian Gallagher and Joan Doran