There has been a significant rise in the number of long-term land leases in recent years, according to the Minister for Agriculture, Simon Coveney.
Speaking to the Oireachtas Joint Committee on Agriculture, Food and Marine Minister Coveney said ‘one of the great successes that has been quietly happening in agriculture has been the move away from conacre to long-term leasing.
“Since we made the tax changes to encourage that over the last few years the increase in the numbers of farmers in long-term leasing is up by 27%,” he said.
The Minister said the industry needs to keep pushing long-term leasing as a much more sensible means of increasing farm sizes as opposed to conacre.
“Young farmers getting a piece of land for 11 months is a disaster for lots of reasons.
“In terms of being able to borrow money on the back of it and in terms of investing in the soil and the field if they don’t know whether they’re going to have it next year,” he said.
In the Society of Chartered Surveyors Ireland (SCSI) 2015 Land Market Survey, SCSI members were asked about their awareness of the recent changes to the treatment of income from long-term leasing out of lands.
The results indicated that a significant minority of respondents indicated a move towards longer lease terms and an increase in the volume of land let out under long-term lease agreements.
Budget 2015 saw the introduction of a 50% increase in the tax-free thresholds for long term leases of five (€18,750) seven (€22,500) and 10 years (€30,000) and the introduction of a new 15-year lease tax free threshold of €40,000 for lessors of any age will help increase the level of land on long term leases.
In 2014, there were only 6,250 leases claim the current tax relief whereas, nearly 40,000 rental arrangement were on a conacre or yearly basis.