In Budget 2018 last Tuesday, Minister for Finance Paschal Donohoe raised the stamp duty rate from 2% to 6% on sales of all commercial land.
After much confusion, it became apparent that sales of agricultural land would be subject to the higher rate of tax from midnight on Tuesday.
Since then, farm organisations have been reacting with anger to the new rate.
On Friday, the Irish Farmers Association (IFA) stepped up its campaign to have changes made to the rate by writing a stern letter to Minister Donohoe.
In the letter, IFA president Joe Healy acknowledged that positive work had been carried out by the Department of Finance in recent years with regards to making changes to the agri-taxation structures but that the stamp duty rate changes were unacceptable.
IFA believes that this decision must be reversed to support continued land mobility and lifetime farm transfers.
“Decisions on agri-taxation taken by the Government over the period of the last number of years have been very positive, contributing to farm development and restructuring,” Healy said.
“The increase in the rate of stamp duty for commercial property, including farmland, from 2% to 6%, is a very negative step in this context. It will significantly add to the costs of farm purchase and transfer, and will disincentivise land mobility.
“It will undermine opportunities for farmers to consolidate their farm holdings, to invest to improve their farm viability and will discourage lifetime transfers, as there is no stamp duty on transfers that occur on inheritance.”
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The Irish Farmers Journal revealed on Thursday that the Department of Finance was willing to look at some concessions on the matter but there has been nothing official from Merrion Street yet.
The association is calling for a full reversal of the stamp duty rate. It is calling for all actively farmed land be subject to the 2% rate, not the 6% rate.
“IFA believes that this decision must be reversed to support continued land mobility and lifetime farm transfers. The Finance Act 2017 must provide for land that is purchased or transferred, and used for farming, to remain at the 2% stamp duty rate.
“We propose that this measure is ring-fenced for active farmers, who farm the land themselves, and for whom the qualifying criteria would be the same as is currently applied by Revenue for other agricultural taxation measures
“Under these measures, the land must be farmed on a commercial basis, must be held for a minimum of six years, and the farmer is required to either hold a recognised agricultural qualification or farm for not less than 50% of his or her normal working week,” Healy added.
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Full coverage of the stamp duty issue
In Budget 2018 last Tuesday, Minister for Finance Paschal Donohoe raised the stamp duty rate from 2% to 6% on sales of all commercial land.
After much confusion, it became apparent that sales of agricultural land would be subject to the higher rate of tax from midnight on Tuesday.
Since then, farm organisations have been reacting with anger to the new rate.
On Friday, the Irish Farmers Association (IFA) stepped up its campaign to have changes made to the rate by writing a stern letter to Minister Donohoe.
In the letter, IFA president Joe Healy acknowledged that positive work had been carried out by the Department of Finance in recent years with regards to making changes to the agri-taxation structures but that the stamp duty rate changes were unacceptable.
IFA believes that this decision must be reversed to support continued land mobility and lifetime farm transfers.
“Decisions on agri-taxation taken by the Government over the period of the last number of years have been very positive, contributing to farm development and restructuring,” Healy said.
“The increase in the rate of stamp duty for commercial property, including farmland, from 2% to 6%, is a very negative step in this context. It will significantly add to the costs of farm purchase and transfer, and will disincentivise land mobility.
“It will undermine opportunities for farmers to consolidate their farm holdings, to invest to improve their farm viability and will discourage lifetime transfers, as there is no stamp duty on transfers that occur on inheritance.”
Support active farming
The Irish Farmers Journal revealed on Thursday that the Department of Finance was willing to look at some concessions on the matter but there has been nothing official from Merrion Street yet.
The association is calling for a full reversal of the stamp duty rate. It is calling for all actively farmed land be subject to the 2% rate, not the 6% rate.
“IFA believes that this decision must be reversed to support continued land mobility and lifetime farm transfers. The Finance Act 2017 must provide for land that is purchased or transferred, and used for farming, to remain at the 2% stamp duty rate.
“We propose that this measure is ring-fenced for active farmers, who farm the land themselves, and for whom the qualifying criteria would be the same as is currently applied by Revenue for other agricultural taxation measures
“Under these measures, the land must be farmed on a commercial basis, must be held for a minimum of six years, and the farmer is required to either hold a recognised agricultural qualification or farm for not less than 50% of his or her normal working week,” Healy added.
Read more
Full coverage of the stamp duty issue
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