The European Commission is pushing Ireland to widen its property tax base to include farmland as well as development land and derelict sites.

A report in today’s Irish Examiner states that the Commission’s budget recommendations indicate that Ireland needs to increase income from property tax. The Commission said the base from which Ireland draws property tax from is “relatively narrow”.

Reacting to the proposal, IFA president Eddie Downey has said that tax on farmland would be “unaffordable” for farmers.

“Households like all other households in the state were already struggling to cope with a raft of extra taxes including income and USC charges and property and water taxes. VAT and carbon taxes increases in the last few years have added to escalating costs on farms and is challenging the competitiveness and viability of many farm businesses,” he said.

He added: “The nature of farming is such that a relatively large amount of fixed capital in land and buildings is required to produce a modest average income per farm family. Tax is paid on any taxable income generated from the output of the farm. In addition, when the asset is transferred or disposed of, it is liable to capital taxation, both for the disposer and recipient.”

Downey also confirmed that he has held a meeting with Agriculture Minister Simon Coveney who said he will push for farmland to remain out of the property tax base at today’s Cabinet meeting.

More in this week's Irish Farmers Journal.