Opinion: farmers hung out for property developers in Budget 2018
For a while, Budget 2018 was careering down the road of obscurity.
A series of leaks on the morning of the speech by Minister for Finance Paschal Donohoe had the key elements out in the open with no expectation of surprises.
That was until the Irish Farmers Journal noted on Tuesday morning that the new stamp duty rate of 6%, up from 2%, would be applicable on all commercial land.
This means any farmland sold outside the family would cost more from midnight on Tuesday.
For example, the stamp duty payable on a €200,000 farm went to €12,000 from €4,000.
It won’t affect young trained farmers or inter-family transfer, but it will hit many people.
From here, the Government’s reaction was mixed.
Ultimately, farmers have been hung out to dry in favour of property developers
Clearly badly briefed by Department staff, Minister for Agriculture Michael Creed told farming media after the budget that farmland would not be part of the stamp duty increase.
“We need to nail this one, because I’ve seen some comment on social media; the increase in stamp duty does not apply to agricultural land,” he said.
Definitive by Creed. But was it true?
Not so said Minister Donohoe three hours later when asked to clarify the measure.
He said farmland would be part of the rate hike, making it more expensive to purchase on Wednesday than it was on Tuesday.
An effort from Independent TD, and farmer, Michael Fitzmaurice to get an amendment to exclude farmland fro the hike was defeated at midnight on Tuesday.
Step forward farmer’s son Richard Bruton, who also happens to be the Minister for Education and Skills.
He was the Government’s representative on Tuesday night when Fitzmaurice tabled his amendment.
Minister Bruton dismissed farmers’ concerns by saying the stamp duty rate was higher in previous years and farmers have been receiving various other supports so they can afford this hike.
Yes, stamp duty was higher, at 9%, between 2002 and 2008, but capital gains tax was 20% back then. It’s 33% now.
This is a serious misjudgement by the departments of agriculture and finance.
It is sloppy at best from Agriculture for seemingly not having a full grasp of the situation for farmers. It is arrogant at worst for Finance, which failed to understand the complex nature of farm purchases.
The stamp duty rate change was to get the commercial property market moving and is also aimed at putting some €370m in Government coffers.
Ultimately, farmers have been hung out to dry in favour of property developers.
A benign budget has become one that will hurt the Department of Agriculture’s reputation among its people.