Farm­ers back­lash over stamp duty hike on the sale of farms

Irish Daily Mail - - News - By Paul Neilan

FARM­ERS are urg­ing the Govern­ment to take ac­tive farm­land out of the new 6% stamp duty on sales an­nounced in the Bud­get.

And they have also called for Agri­cul­ture Min­is­ter Michael Creed to hon­our his com­mit­ment.

Dur­ing his post-Bud­get state­ment on Tues­day, Mr Creed said that farm­land sales would be ex­empt from the new 6% levy and re­main at 2%, although no such ex­emp­tion had been men­tioned ear­lier in the day by Fi­nance Min­is­ter Paschal Dono­hoe.

A mo­tion to ex­clude farm sales from the hike was later de­feated in the Dáil and it is now to be treated as com­mer­cial land.

The Ir­ish Farm­ers As­so­ci­a­tion (IFA) is now mak­ing a case for the ex­emp­tion for farm­land to be a ‘spe­cial case’ to be re­tained and for stamp duty to re­main at 2%.

Min­is­ter Dono­hoe did re­tain a ‘con­san­guin­ity’ stamp duty re­lief of 1% for in­ter­fam­ily trans­fers from a 67-year-old who is trans­fer­ring land for a fur­ther three years and kept on a to­tal ex­emp­tion for trained farm­ers un­der 35 years of age for the same length of time.

The con­san­guin­ity scheme aims to en­cour­age con­tin­u­ing in­ter-gen­er­a­tional use of farms sooner, rather than see the farm be trans­ferred through a de­ceased owner.

Speak­ing to the Ir­ish Daily Mail, IFA Pres­i­dent Joe Healy last night said that farm­ers will pur­sue the 2% re­ten­tion as ac­tive farm­land is a ‘spe­cial case’. ‘It’s ob­vi­ous there was a break­down between the Depart­ment of Fi­nance and the Depart­ment of Agri­cul­ture,’ he said.

‘There were dif­fer­ent sig­nals com­ing from both sec­tions on Bud­get Day. We’re look­ing for the 2% to be the out­come re­gard­less of who is right and who is wrong.’

He added: ‘We want the Fi­nance Act to al­low for land pur­chase or trans­ferred and used for farm­ing, that’s im­por­tant, used for farm­ing, to re­main at 2%. There is prece­dent there with the Rev­enue to clas­sify it as farm­land.

‘We want to get it changed back to 2% and are lob­by­ing to do so be­fore the Fi­nance Act comes in. It’s so im­por­tant.

‘We’ve an age­ing and small farm struc­ture with an av­er­age farm-size of 37 hectares, an av­er­age in­come of €26,000 and we face so many chal­lenges like low com­mod­ity prices, Brexit, which is the big­gest chal­lenge of our life-time, and in­ter­na­tional trade deals.

‘The last thing we want is more im­ped­i­ments or ob­sta­cles to come in the way and this is a costly one. For a guy who buys 50 acres, for ex­am­ple, and pays €500,000 for it, his stamp duty goes from €10,000 to €30,000.

‘It’s just in­cred­i­ble that they would come out with some­thing like this. It shows a lack of in­ter­est and knowl­edge of what is needed to en­cour­age the pro­duc­tive as­pect of Ir­ish farm­ing. The Min­is­ter must go back and plead the case.

‘If res­i­den­tial de­vel­op­ment land can be ex­cluded from the rate then land pur­chased

for farm­ing can be ex­cluded,’ he said.

When con­tacted by the Mail, the depart­ment con­firmed the young farmer ex­emp­tion and the con­san­guin­ity re­lief term-ex­ten­sions but said the in­creased stamp duty ap­plied to ‘all’ non-res­i­den­tial prop­erty.

‘The Bud­get an­nounce­ment by Min­is­ter Dono­hoe re­lates to an in­crease in the stamp duty rate for all non-res­i­den­tial prop­erty trans­ac­tions from 2% to 6% with a re­fund scheme to op­er­ate for land pur­chased for hous­ing de­vel­op­ment where the de­vel­op­ment com­mences within 30 months of land pur­chase.

‘The Fi­nance Bill will pro­vide de­tails on tran­si­tional ar­range­ment for those with signed con­tracts and the Depart­ment of Agri­cul­ture are seek­ing to ex­am­ine a po­ten­tial change to the con­san­guin­ity up­per age limit also in that con­text,’ said an Agri­cul­ture spokesper­son.

Ac­cord­ing to the IFA, around 5,000 farms were sold last year, amount­ing to 34,000 acres trans­ferred.

Of those, 700 were to farm­ers un­der 35 years of age, while 850 were un­der the ‘con­san­guin­ity’ scheme, leav­ing 3,300 com­ing un­der the 2% stamp duty rate, now li­able for 6%.

The Fi­nance Bill is due to be pub­lished on Oc­to­ber 19. Ef­forts by the Mail to con­tact Min­is­ter Creed last night were un­suc­cess­ful.

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