How will farmers benefit from stamp duty reliefs?

It was announced earlier today (Friday, June 15) that two stamp duty reliefs for farmers are set to commence in the coming weeks.

The Minister for Agriculture, Food and the Marine, Micheal Creed, and the Minister for Finance and Public Expenditure, Paschal Donohoe confirmed the news.

Also Read: Stamp duty reliefs for farmers set to commence

This morning’s announcement relates to a stamp duty relief for farm consolidation and a stamp duty relief for long-term leases.

Farm consolidation

As part of these developments, stamp duty relief for farm consolidation allows for a 1% rate of stamp duty – as opposed to the general rate of 6% – to apply.

But this is only applicable where land transactions qualify for a ‘Farm Restructuring Certificate’ for the purposes of capital gains tax relief on farm restructuring, according to a statement from the Department of Agriculture, Food and the Marine.

Continuing, the statement explained: “It will apply in relation to instruments conveying or transferring agricultural land that are executed on or after January 1, 2018, and on or before December 31, 2020.

Where there is a purchase and sale of land within 24 months of each other that satisfy the conditions of consolidation, then stamp duty will only be paid to the extent that the value of the land that is purchased exceeds the value of the land that is sold.

“In addition, both the purchase and sale must occur between January 1, 2018, and December 31, 2020. In such a situation stamp duty will only apply at the rate of 1% on the excess,” it said.

The main conditions for the relief are:
  1. There must be a valid consolidation certificate issued by Teagasc in relation to the purchase and sale of land, occurring within 24 months of each other. The Minister for Agriculture, Food and the Marine has made the necessary guidelines detailing how applications for consolidation certificates are to be made to Teagasc under capital gains tax, as well as setting out – amongst other things – the conditions of consolidation;
  2. The purchaser or purchasers must retain ownership of the land for a period of five years;
  3. The conveyance must contain a certificate stating that the purchaser is entitled to the relief;
  4. A clawback of the relief will apply where the land or part of the land purchased is disposed of or partly disposed of before the end of the five-year holding period. Such a clawback will not occur where the land purchased is compulsorily acquired.

The stamp duty relief for farm consolidation is scheduled to commence on August 1.

Revenue has reportedly advised that it is not possible to claim the relief prior to the commencement order being issued.

However, once commenced, the relief will be available where all of the conditions outlined above are met.

Stamp duty relief for long-term leases

As well as a stamp duty relief for farm consolidation, it was announced this morning that there will be a full relief on stamp duty payable on long-term leases of farmland.

This was a recommendation of the ‘Agri-Taxation Review’ – which was a joint initiative between the Department of Agriculture, Food and the Marine and the Department of Finance and Public Expenditure.

The stamp duty relief for long-term leases is set to commence on July 1.

The delay in commencing this measure was reportedly due to finalising administrative arrangements for collecting EU state aid data, which necessitated legislative change, according to the statement from the department.