The Department of Finance has confirmed to the Irish Farmers Journal that Minister Paschal Donohoe will commence farm consolidation stamp duty relief on 1 August.
A farmer who wished to remain anonymous told the Irish Farmers Journal that his family had delayed the conclusion of a land deal agreed last year until mid-July, so that stamp duty would fall due after the measure commences next Wednesday.
Here is how the new rules will affect the transaction:
The family is selling a piece of land worth €130,000.They are buying another block of land worth €300,000.The trebling of stamp duty last October meant that the tax on the deal would amount to 6% of the value of the land purchased, or €18,000.Consolidation relief means they can avail of a reduced rate of 1%. Moreover, only the difference in value between the land purchased or sold, ie €170,000, is liable. Stamp duty will therefore be €1,700. The farmer must produce a certificate from Teagasc confirming that the deal complies with the terms and conditions of consolidation relief, subject to a fee of €300.By waiting for the August commencement of the relief, the net saving amounts to €16,000.While it was possible for farmers to conclude transactions earlier this year and claim back the relief once the measure commences, the farmer said his family would not have been able to finance such a large cash advance or run the risk that the measure would not be confirmed.
The Department of Finance has confirmed to the Irish Farmers Journal that Minister Paschal Donohoe will commence farm consolidation stamp duty relief on 1 August.
A farmer who wished to remain anonymous told the Irish Farmers Journal that his family had delayed the conclusion of a land deal agreed last year until mid-July, so that stamp duty would fall due after the measure commences next Wednesday.
Here is how the new rules will affect the transaction:
The family is selling a piece of land worth €130,000.They are buying another block of land worth €300,000.The trebling of stamp duty last October meant that the tax on the deal would amount to 6% of the value of the land purchased, or €18,000.Consolidation relief means they can avail of a reduced rate of 1%. Moreover, only the difference in value between the land purchased or sold, ie €170,000, is liable. Stamp duty will therefore be €1,700. The farmer must produce a certificate from Teagasc confirming that the deal complies with the terms and conditions of consolidation relief, subject to a fee of €300.By waiting for the August commencement of the relief, the net saving amounts to €16,000.While it was possible for farmers to conclude transactions earlier this year and claim back the relief once the measure commences, the farmer said his family would not have been able to finance such a large cash advance or run the risk that the measure would not be confirmed.
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