Farmers in ‘quagmire’ over Farm Consolidation Relief

Concerns have emerged over the enactment of a new stamp duty reduction measure on farm consolidation sales.

The new relief measure, which was voted on in the Finance Bill last December, was said to be available for certain land purchases carried out from January 1 2018 to December 31 2020 – subject to a number of conditions.

The stamp duty rate that applies to qualifying purchases – where a farmer sells and buys land in order to consolidate their farm holding – is now set at 1%.

However, independent TD Michael Fitzmaurice has claimed that clearance from the EU is stalling the activation of the measure nationwide.

“Farmers are in a quagmire in relation to consolation,” said Fitzmaurice who has been in contact with both the Department of Finance and the Department of Agriculture, Food and the Marine on the issue.

“Many farmers have bought holdings close to their main farm and have sold lands that are a distance away.

But, now they are left in a debacle as the Department of Finance has not got clearance under EU state aid rules.

However, as the land is agricultural, he says it’s ultimately up to the Minister for Agriculture, Food and the Marine, Michael Creed, to get the EU go-ahead.

“The Minister for Agriculture needs to address this Issue at a high level as farmers may be paying up to 6% stamp duty due to this problem not being solved.

“The minister must move rapidly to get Europe’s clearance. In the meantime farmers should not be charged until the go-ahead comes through because it’s big money for farmers,” he said.

Once again this Government has tried to claim the praise in a budget matter and now they are dragging their heels when it comes to giving the relief.

“I am following this matter and intend to speak to EU officials to make sure this is delivered,” concluded Fitzmaurice.

Conditions

Although the Finance Act 2017 provides for a relief from stamp duty – called Farm Consolidation Relief – it cannot be claimed until the Minister for Finance makes a commencement order.

In order to qualify for the relief a number of criteria must be met, including:
  • You must be a farmer; i.e. a person who spends not less than 50% of their normal working time farming. If you are purchasing as a joint owner, only one of you must be a farmer;
  • You must sell land and buy other land in order to consolidate your holding within 24 months on or after January 1 2018 and before 31 December 2020;
  • You can also claim the relief if you receive the other land as a gift;
  • You must have a consolidation certificate issued by Teagasc;
  • You must intend to retain ownership of the land and use the land for farming for a period of at least five years.