Up to now, there has been very little detailed information on the differences in national approaches to farmer taxation and the taxation of farm land.

The European Landowners Organisation (ELO) has now published the most complete coverage of the area that I have seen with details of inheritance taxes, annual land taxes, income tax, transfer tax as well as capital gains tax on the sale of farm land.

Normally in this country, tax debates focus on the corporate taxes paid by multinationals and business, but the discretion given to member states, in relation to farming, is almost unlimited.

The only major tax with common rules is VAT, where strict rules apply to how the VAT refund scheme to farmers should apply.

One of the most controversial is inheritance tax – or capital acquisitions tax as it operates in this country – where the inheritor pays it rather than it being levied on the estate before it is distributed among the beneficiaries.

Since the early 2000s, eleven countries have gotten rid of inheritance tax on agricultural land, among them Sweden, Norway and the UK. Of the rest, practically all of them have special measures to reduce the taxable value of farmland.

With leased land, Austria and Ireland have special exemptions for leased income.

Overall, the country with the highest rate of land taxes in total is France, and this is given as the primary reason why agricultural land prices are so low in France. Anyone thinking of farming there should do their homework carefully.

While Ireland, from a farm tax point of view, is at neither extreme, our stand-out feature is the amount of our agricultural land that is in permanent grassland. Ireland’s 90% compares with France’s 33%, Holland’s 42% and the UK’s 65%, which is the next highest.

One of the most far-reaching changes in Irish farm taxation was the abolition of rates on agricultural land.


These had become an enormous burden until the IFA-backed court case succeeded in winning a constitutional test case that overturned them.

But at this stage we are not alone in Europe, where countries such as Germany, Hungary, Italy, The Netherlands, Poland and the UK (now outside the EU) have all removed agricultural rates of their equivalent. Again, France is the most conspicuous outlier.

Capital gains tax regimes on farm land vary across Europe, with Austria, Belgium and The Netherlands exempting farmland completely, but other countries have a whole range of conditions on how long land must be owned before concessions of capital gains tax applies.

The Government is preparing a new land use policy, and tax incentives have been shown to be powerful stimulants or hindrances to progress. A sensible debate is needed at this stage.