Revenue Commissioners could throw “a spanner into the works” if proposed changes to stamp duty exemption on transferred land for farm families comes into effect, a senator has warned.

According to Senator Fiona O’Loughlin, proposed changes set out in a report published by the Commission on Taxation and Welfare could cost the average 100ac farm €15,000/year.

Senator O’Loughlin told the Seanad that when a farm is transferred from one generation to the next and “it has been incorporated into a limited company”, there has been a stamp duty exemption scheme for young trained farmers.

The senator said this “encouraged that changeover to happen before the appointed successor was 35 years of age”.

“The young trained farmer is required to farm the holding on a full-time basis for five years. A large proportion of family farms where the exemption has been availed of are dairy farms,” he added.

“For that reason, many dairy farms are trading as companies, or intend to.

“Now Revenue has really thrown a spanner into the works. The proposed changes would cost the average 100ac farm €15,000/year.”

Senator O’Loughlin, who is Fianna Fail’s deputy leader in the Seanad, believes it is important that the upper house of the Oireachtas sends a “message” to the Minister for Agriculture, Food and the Marine, Deputy McConalogue, and to the Minister for Finance, Deputy Michael McGrath to state that the “proposal would be a retrograde step”.

“When we are talking about incentives to try to keep farmers, both male and female, in farming, this proposed change is regrettable. It would cost a substantial amount to any farm family,” the senator added.

Stamp duty

In order to qualify for relief from stamp duty currently:

  • A transferee must be under 35 years of age on the date of execution of the deed of transfer of the land;
  • The transferee must, as a general rule, hold a trained farmer qualification;
  • The transferee must spend at least 50% of their normal working time farming the transferred land, and retain ownership of that land.

These requirements apply to deeds on the transfer of land “which are executed on or before June 30, 2023”.

Separately, the Irish Farmers’ Association (IFA) has again warned political representatives that the “full economic impact” of any proposed amendments on future taxation or the welfare system put forward by the Commission on Taxation and Welfare must “be thoroughly understood” for farm families.

Farm transfers

Tim Cullinan, IFA president, told the Oireachtas Committee on Budgetary Oversight that the “drip feeding” of proposals from the commission has “created a cloud of uncertainty for farm families”.

“We have anecdotal evidence, for example, of farmers transferring farms earlier than anticipated, purely out of fear that agricultural relief and existing capital acquisition tax thresholds will be significantly eroded and their children left with a considerable tax bill,” he added.

Cullinan also warned that while the IFA “recognises the climate challenge we face” and will “support all reasonable proposals to reduce emissions and decarbonise the economy” it will not support “measures that may make family farms unviable”.

He said recommendations “to levy excise duty and other taxes on marked gas oil, MGO, or agricultural diesel at the same rate that applies to unleaded petrol” could mean the difference between a farm being viable and unviable. 

“If these were to be equalised, at today’s prices and rates it would see at least an extra 50c/L added to the price of agricultural diesel.

“With 1,147 million of MGO used in 2022, this would mean an extra cost of over €570 million having to be shouldered by primary Irish agriculture in the main,” the IFA president told the committee.