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The €70,000 cap on young farmer relief is contrary to policy and will have negative effects on young farmers, Fianna Fáil TD Jackie Cahill has said.
In October the Irish Farmers Journal revealed that a cap of €70,000 is to be applied collectively to three of the main young trained farmer reliefs as part of the finance bill.
Cahill said the cap is contrary to policy.
If we’re serious about attracting young people into farming, this €70,000 cap will have seriously negative effects on the ability of young farmers to take over the family farm and expand
“The European Commission has said that there must be a fund in the next Common Agricultural Policy (CAP) for young farmers, but on the other side they’re putting a limit on young farmer relief.
“These two policies are not compatible side by side. If we’re serious about attracting young people into farming, this €70,000 cap will have seriously negative effects on the ability of young farmers to take over the family farm and expand,” he said.
This publication previously reported that the average amount of tax relief a young farmer avails of under all three measures amounts to €47,304 over five years.
However, young farmers with expansion plans could be hit by the cap: if a young farmer were to buy a farm worth €1m, they would save the normal 6% stamp duty fee of €60,000 for being a qualified young trained farmer.
However, once the €70,000 limit is in place they will only have a remaining €10,000 for tax relief to claim for their remaining time as a qualified young trained farmer under 35 years of age.
CAP policy
Meanwhile, under the current Common Agricultural Policy (CAP) proposals, generational renewal is a key priority for the European Commission.
A 2% fund for young farmers will also be created from the basic payment pot, which will become the Basic Income Support Scheme.
Member states also have to line out in their CAP strategic plan how they will encourage more young farmers into the sector.
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