Efforts to defuse Coalition row over planned deferral of residential zoned land tax

Efforts are under way within the Coalition to defuse a row between the Green Party and Fianna Fáil over the planned deferral of the residential zoned land tax.
Taoiseach Simon Harris said this week that the tax could be delayed in order to prevent “active farmers being penalised.” It came after reports that Fianna Fáil Minister for Finance Jack Chambers was planning the deferral.
The tax was due to kick in next year, with landowners facing an annual 3 per cent payment on the market value of land that is earmarked for housing and also serviced by infrastructure that would allow residential development.
The Irish Times yesterday reported tensions within the Green Party over the move with party TD Steven Matthews describing the plans to defer the tax as “incredible” and “like hiding food in a famine”.
On Wednesday, Minister of State in the Department of Environment and Communications Ossian Smyth said a deferral would not be accepted.
“Deferring the entire tax for a year because you found some hard cases that are the minority of people is not the right answer. So … if there are a proposals to identify somebody who is a hard case, who’s being treated unfairly and that they need to have some kind of a pay-off or an exemption, that’s fine.
“But what we’re not going to do is defer tax for a year. I would never accept that – that’s not going to happen.”
Following his comments, a senior Government source told The Irish Times that the deferral may still proceed notwithstanding Green Party misgivings. The source said the current advice is that the only way to exclude active farmers from having to pay the tax is through a deferral while alternative solutions are identified. However, the source emphasised that all options were being explored in order to find a solution.
Senior Fine Gael sources were privately critical of Mr Chambers and said that no such decision to defer had been made when reports first emerged.
It is understood that the Taoiseach discussed the issue briefly with Tánaiste Micheál Martin on Wednesday, as open divisions between the Green Party and Fianna Fáil became clear.
Senior Government sources agreed it would be difficult for the Green Party to back down given the public position taken, but suggested that compromise could be amending the legislation, perhaps through the Finance Bill, to exclude land that is being actively farmed.
Other sources, however, pointed to difficulties with this approach.
The row shines a light on the growing sense of tension within Government as the Coalition approaches its last budget during its final few months in office. Within the Green Party there is an awareness that the party could be facing a difficult general election. All parties will be keen to appeal to their own voters and potential voters – and less careful about offending their Coalition partners.