Stamp duty increase ‘could put a temporary dampener on land sales’
AUCTIONEER Paddy Jordan probably claimed the title of selling the last farm before the increase in stamp duty announced in the Budget took effect.
He sold a 180-acre residential farm yesterday afternoon, which he described as “some of the best land in Kildare”, for €3.2m.
Bringing the gavel down yesterday, he saved the buyer a substantial amount in stamp duty, which jumped from 6pc to 7.5pc at midnight.
Land prices in the first six months of the year were affected by Brexit and poor beef prices.
The amount of agricultural land sold across the country was down almost 30pc, compared with the first six months of 2018.
Furthermore, the amount of money generated by auction sales went down by 18pc on the same period last year.
Yesterday’s announcement that the rate of stamp duty on commercial property, including agricultural land, would increase to 7.5pc will further affect land sales in the immediate future, according to Limerick-based auctioneer Tom Crosse.
The auctioneer handled the sale of land for a record price in the county in January, when he sold 27 acres in Adare for €1m, or almost €38,000/ac.
Last Friday, he sold a residential 34-acre farm in the county for €530,000.
The stamp duty on 34 acres of non-residential farm land would have been €31,800, but since midnight, that same land will cost the buyer €39,750 in stamp duty.
“The increase in stamp duty will cause a dampener on the market initially, but farmers are a resilient bunch of people,” he said.
“Despite the negatives of Brexit and beef in recent months, the dairy sector has been quite buoyant and dairy farmers have been key at most auctions.
“So, too, have business people, who have come back into auction rooms in recent months.”