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The Minister for Agriculture, Food and the Marine, Micheal Creed, and the Minister for Finance and Public Expenditure, Paschal Donohoe, today announced progress made on agri-taxation policy issues. The ‘Agri-taxation Review’, a joint initiative between the two Departments, put in place a comprehensive taxation strategy for the sector with specific policy objectives to increase the mobility and the productive use of land; assist succession; and complement wider agriculture policies such as environmental sustainability.

Both Ministers today confirmed that following consultation with the EU Commission on State Aid clearance, a commencement order will be signed for the Stamp Duty relief for farm consolidation, which was contained in Finance Act 2017.

In addition, administrative arrangements have now been finalised to allow commencement of the Stamp Duty relief for long-term leases.

Minister Creed stated,

“I am pleased that the commencement of the consolidation relief completes the package of measures I agreed with Minister Donohoe following the increase of the general stamp duty rate in the last Budget. Consolidation Relief is important environmentally and economically for farmers seeking to consolidate fragmented holdings”.

He added,

“I am also pleased that we can introduce the Stamp Duty Relief for long-term leases, which is part of a package of measures promoting long-term leasing and increases the mobility and the productive use of farmland. This is especially important for young farmers and those seeking to increase the productivity of their farm”.

Minister Donohoe stated,

“I am pleased to commence these two measures, involving a Stamp Duty relief for farm consolidation and a Stamp Duty relief for long-term leases. The agricultural sector and the wider rural economy are vital to the success and well-being of our country. Both of these measures should work to support sustainable rural development, vibrant and sustainable communities and promote the productive use of farmland”.

The Stamp Duty relief for long-term leases will commence on 1 July and the Stamp Duty relief for farm consolidation will commence on 1 August.

Notes:
Stamp Duty Relief for farm consolidation allows for a 1% rate of stamp duty (as opposed to the general rate of 6%) where the land transactions qualify for a “Farm Restructuring Certificate” for the purposes of Capital Gains Tax Relief on Farm Restructuring. It will apply in relation to instruments conveying or transferring agricultural land that are executed on or after 1 January 2018 and on or before 31 December 2020. Where there is a purchase and sale of land within 24 months of each other that satisfy the conditions of consolidation, then stamp duty will only be paid to the extent that the value of the land that is purchased exceeds the value of the land that is sold. In addition both the purchase and sale must occur between 1 January 2018 and 31 December 2020. In such a situation stamp duty will only apply at the rate of 1% on the excess. The main conditions for the relief are:

1. There must be a valid consolidation certificate issued by Teagasc in relation to the purchase and sale of land, occurring within 24 months of each other. The Minister for Agriculture, Food and the marine has made the necessary guidelines detailing how applications for consolidation certificates are to be made to Teagasc under capital gains tax and also setting out, amongst other things, the conditions of consolidation. 
2. The purchaser or purchasers must retain ownership of the land for a period of five years.
3. The conveyance must contain a certificate stating that the purchaser is entitled to the relief 
4. A clawback of the relief will apply where the land or part of the land purchased is disposed of or partly disposed of before the end of the 5 year holding period. Such a clawback will not occur where the land purchased is compulsorily acquired.

More information is available at: https://www.agriculture.gov.ie/agri-foodindustry/agri-foodandtheeconomy/agri-foodbusiness/agri-taxation/indicativelistofagri-taxmeasures/capitalgainstaxmeasures/

The Revenue Commissioners have advised that it is not possible to claim the relief prior to the commencement order being issued. However, once commenced, the relief will be available where the conditions above are met and the purchase and sale occurs on or after 1 January 2018 and on or before 31 December 2020.

Stamp Duty Relief for long-term leases is a full relief on Stamp Duty payable on long-term leases of farmland and was a recommendation of the Agri-Taxation Review. The delay in commencing this measure was due to finalising administrative arrangements for collecting EU State Aid data, which necessitated legislative change.