The budget’s trebling of stamp duty on farmland sales will not apply to transactions where a binding contract was signed before 11 October 2017 and the sale is executed before 1 January 2018, the Revenue has clarified.

ICMSA farm business chair Lorcan McCabe said this poses difficulty for farmers who paid a deposit after purchasing land at auction but not signed a contract before budget day, and for sales delayed after 1 January by legal issues.

Penalty

“It would be grossly unfair if a farmer suffered an effective 4% penalty due to circumstances absolutely outside of his or her control,” McCabe said.

In addition, all buyers must now pay the new 6% rate if they want their deed stamped, and those eligible for the old 2% rate will be refunded only after the Finance Bill is passed.

The Law Society has warned Minister Donohoe that this unexpected outlay could “risk transactions falling away, or parties being sued”.

Meanwhile, farmers who sell land to buy more look set to be shielded from the stamp duty increase after Fine Gael and Fianna Fáil TDs lobbied ministers last week.

The “consolidation” exemption is “close to being over the line” for stamp duty, said Fine Gael TD Pat Deering.

Weekly podcast: women in farm organisations, straw shortage, David McWilliams

'Consolidation' stamp duty exemption under discussion

Stamp duty transition slammed

Solicitors say transitional arrangements for the stamp duty rate increase risk of derailing a number of transactions, while 'consolidation' exemptions are still under discussion.