653AH Deferral of residential zoned land tax in certain circumstances

Summary

This section provides for the deferral of residential zoned land tax where residential development is commenced within the timeframe set out in the grant of planning permission in respect of the relevant site.

Details

(1) This section applies when -

• (a) planning permission has been granted in respect of the development of a relevant site,
• (b) the development to be carried out is wholly or partly residential development. The portion of the relevant site relating to residential development is referred to as ‘relevant residential development’ for the purposes of this section, and
• (c) development has commenced, e.g. a commencement notice has been lodged with the appropriate local authority.

(2) Where more than one commencement notice is lodged with the appropriate local authority., the reference in subsection (1)(c) is a reference to the first commencement notice, in respect of which substantial activity in relation to the development has commenced.

(3) Where this section applies, any residential zoned land tax arising in respect of a relevant residential development on liability dates falling after the lodgement of a commencement notice in respect of such a development, shall, notwithstanding the payment date in section 653Q(2), not be due and payable until the happening of the earlier of -

• (a) the date on which works on the relevant site permanently cease, without the lodgement of certificates of compliance in respect of all of the relevant residential development (as defined) with the appropriate local authority,
• (b) the date on which the relevant site is sold or transferred, without the lodgement of certificates of compliance in respect of all of the relevant residential development (as defined) with the appropriate local authority, and
• (c) the date on which the planning permission granted in respect of the development expires, without the lodgement of certificates of compliance in respect of all of the relevant residential development (as defined) with the appropriate local authority.

(4) In this section, residential zoned land tax deferred pending the happening of the events specified in subsection (3) is referred to as ‘deferred residential zoned land tax’.

(5) The residential zoned land tax that can be deferred in accordance with this section is the tax relating to relevant residential development, which arises in respect of a liability date which falls after the lodgement of a commencement notice and up until the occurrence of the first of the events listed in subsection (3).

The amount of tax deferred shall be -

• all residential zoned land tax due where the development relates to residential development only, or
• an amount of tax based on the portion of the site which has been developed for residential purposes, as determined by ‘A’ in the formula:

        A = B × C

where-

B is the market value of the part of the relevant site that is being developed for residential use (referred to in this section as the ‘qualifying part of the relevant site’), on the valuation date applicable to the liability date, and

C is the rate of 3 per cent.

(6) Where an apportionment of the tax to be deferred is required in accordance with subsection (5)(ii)-

• (a) the market value of the qualifying part of the relevant site (B in the formula in subsection (5)(ii)) on the first liability date after the lodgement of a commencement notice is calculated using the formula used to calculate the market value of the ‘liable part of the relevant site’ in section 653AG(4), and
• (b) for the purposes of calculating the amount of residential zoned land -
  
  1. the part of the relevant site that is being developed for non-residential use will have as its valuation date the next liability date after the lodgement of the (first) commencement notice. The market value on that valuation date will be calculated using the method outlined in subsection (6)(a).
  2. the valuation date in subparagraph (i) will continue to apply until 1 February in the year immediately following the first occurrence of any of the events listed in subsection (3).

(7) Notwithstanding the provision in subsection (3) setting out the earliest date on which deferred residential zoned land tax becomes due -

• (a) residential zoned land tax deferred on an account of the commencement of residential development is not due where the liable person makes a claim on the basis that all relevant residential development is completed within the life of the planning permission granted in respect of the planning permission site, or
• (b) that residential zoned land tax deferred on an account of the commencement of residential development on a relevant site may only be partly payable where the relevant residential development is partly completed within the life of the planning permission granted in respect of the site. Where the percentage of the relevant residential development completed, calculated in accordance with subsection (8), is within any of the percentages in column (1) of the Table to this section, then, on the making of a claim by the liable person, the percentage of the deferred residential zoned land tax relating to the relevant site which is due and payable shall be the corresponding percentage, set out in column (2) of the Table.

(8) For the purposes of determining the amount of deferred residential zoned land tax due (8) and payable in circumstances where a relevant site is partially completed within the lifetime of the planning permission in subsection (7)(b), the percentage of relevant residential development completed on the expiry of the applicable planning permission is determined by ‘A’ in the following formula:

        A = (B/C) × 100

where -

B is the total gross floor space of the relevant residential development completed at the expiry of the planning permission and

C is the total gross floor space of the relevant residential development, as set out in the planning permission.

(9) A claim made under subsection (7) will be in form to be specified by the Revenue Commissioners.

(10) A liable person may only rely on the provisions of this section where a return is filed in respect of each annual liability date in the period to which this section applies.

            Table

Relevant Date: Finance Act 2021