Government to examine 67-year age limit on stamp duty bloodline relief

The Department of Agriculture and the Department of Finance will examine the 67-year age limit on stamp duty consanguinity relief as part of next week’s Finance Bill.

After mounting pressure from opposition TDs and farm organisations to address concerns over the hike in stamp duty on the sale of commercial farmland, the government are considering a number of new measures.

A spokesman for the Minister of Agriculture, Food and the Marine, Michael Creed, confirmed that: “The departments of agriculture and finance are seeking to examine the upper age limit on the consanguinity rate in the context of the Finance Bill.”

It is understood that discussions on “transitional periods” for those that had already signed up to contractual arrangements on purchasing commercial farmland, before budget day, may also be looked at.

Confusion

Earlier IFA president Joe Healy called on the government to “honour the commitment made by Minister for Agriculture Michael Creed” that the increase in commercial stamp duty from 2% to 6% would not apply to farmland.

“The minister must sit down with the Minister for Finance, Pascal Donohoe, as a matter of urgency and clarify how this commitment will be implemented,” he said.

Although Healy acknowledged that the stamp duty reliefs for young trained farmers, and related parties, would take an amount of transactions out of the 6% rate; he said there would still be a substantial amount of land sales and transfers which are not covered by these reliefs.

Minister Creed and Minister Donohoe must make urgent provisions to ensure these transactions undertaken by farmers remain at the old 2% rate.

It has been claimed that trebling stamp duty could cost farmers up to €12 million extra, based on land sales of €300 million in a given year.

The Irish Natura and Hill Farmers Association’s (INHFA’s) national president, Colm O’Donnell, also called for greater clarity on the commercial land tax – which Minister Creed initially stated would “not apply to agricultural land” at a post budget press briefing last Tuesday (October 10).

Where do we currently stand?

Hours later it was confirmed that the stamp duty increase does include farmland.

A proposal by Independent TD Michael Fitzmaurice to exclude agricultural land from the increase was subsequently defeated in the Dail by 64 votes to 31 votes.

Stamp duty reliefs available to farmers purchasing land for agricultural use prior to the budget continue to be in place.  Farmers under 35-years-old who qualify as young trained farmers are fully exempt from stamp duty on farm transfers by gift or sale.

Currently consanguinity relief – which is available to close family members, provided that the transferor is aged 67-years-old or under – has been extended by three years, and fixed at a rate of 1% on transfers by gift or sale.

These reliefs provide significant incentives to encourage earlier inter-generational farm transfers. There are also generous incentives in place to encourage long-term leasing of agricultural land.

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