Farming is the “lifeblood of rural communities across Ireland,” the Minister for Finance told the Dáil today (Tuesday, October 10) during Budget 2024 as he unveiled a number of key measures which could directly impact on farmers.
Minister Michael McGrath outlined a range of agricultural relief measures which he said were designed to “provide important supports to young farmers and the farming sector generally”.
Some of the key measures announced today by the minister included:
- An extension of consanguinity relief;
- An extension to the accelerated capital allowances for farm safety equipment;
- An increase in the maximum aggregate lifetime limit of a number of farm-related reliefs to €100,000 including the Young Trained Farmer Stamp Duty relief, Stock Relief for Young Farmers and the relief for succession farm partnerships.
- An extension to Land Leasing Income Tax Relief which only becomes available when the land has been owned for seven years to support “active farmers”.
Residential Zoned Land Tax
The government has been repeatedly urged to resolve the Residential Zoned Land Tax (RZLT) issue for farmers – the tax which had been due to come into force from next February and which applies to land that is zoned for residential use and has access to services such as water supply, roads and lighting.
The controversial new tax had been met with strong opposition from farming organisations.
In today’s budget the Minister for Finance said that RZLT “is an important initiative to activate suitably zoned and serviced land for housing”.
However, the minister has now “extended the liability date of the tax by one year” to allow for the planned 2024 review of maps to take place and “to afford affected people with a further opportunity to engage with the process”.
VAT registration threshold
Minister McGrath said he intends to increase the existing VAT registration thresholds for businesses from €37,500 for services and €75,000 for goods to €40,000 for services and €80,000 for goods respectively.
The government also confirmed that the flat-rate compensation measure for farmers will decrease from 5% to 4.8% from January 1, 2024.
The flat-rate addition compensates farmers who are not VAT registered for VAT incurred on their purchases.
Cost of living
The Minister for Finance confirmed that he will extend the 9% reduced VAT rate for gas and electricity for another 12 months.
He also announced that the final tranche of fuel excise increases – including an increase to the price of green diesel – which were due to take effect on October 31, will be deferred until next year.
A one-year Mortgage Interest Tax Relief scheme for homeowners with an outstanding mortgage balance on their primary dwelling house of between €80,000 and €500,000 as of December 31, 2022 will also be introduced by the minister.
But the Vacant Homes Tax, which was introduced last year, will be increased by five times the property’s existing basic Local Property Tax rate.
This increase will take effect from the next chargeable period, starting this November.
Retirement Relief for farmers
According to the Minister for Finance another key measure for farmers, announced in Budget 2024, was Retirement Relief.
MInister McGrath said this “supports the intergenerational transfer of businesses and farms and works to ensure their smooth transition so that they continue to play their important role in the Irish economy”.
The minister said: “In line with government policy on the age of retirement, I am extending the upper age limit for the relief from 65 until the age of 70.
“The reduced relief which was available on disposals from age 66 onwards will now apply from age 70.”
According to the minister these changes will come into effect from January 1, 2025.
“I will also introduce a limit on disposals to a child up to the age of 70, as recommended by the Commission on Taxation and Welfare,” he added.