‘Leasing is financially very attractive for the owners given the tax benefits’ – Jordan Auctioneers

AgriLand spoke to Clive Kavanagh, director of Jordan Auctioneers, recently on land leasing prices in the country.

Jordan Auctioneers’ most recent lease was a 70ac tillage holding outside Monasterevin, Co. Kildare, on a five-year lease for €210/ac.

“Our view of leasing is that it is financially very attractive for the owners given the tax benefits. It is without doubt affecting the supply of land coming for sale as people are deferring the decision to cut their ties with land and therefore opting for a leasing structure instead,” commented Clive.

“The market is strong for lands, particularly due to the dairy expansion in certain areas. With the cost of land in Ireland, if you can secure a tenancy for a fixed period it gives you the opportunity to develop your enterprise without having to pay the top price for purchase.”

‘Not keen to dispose of land’

Continuing, Clive said: “Prices vary significantly depending on the quality of land, the size of the holding and the lease length.

In general, grassland is achieving anywhere from €150 to €200/ac, with tillage varying from €150 to €250/ac. If there is a strong farmer adjacent to a holding then a price in excess of this might be achieved.

With the tax benefits of leasing, the traditional 11-month agreement is less and less used, with leases in excess of five years far more common as they avail of the tax reliefs, according to Clive.

“Leasing suits people who perhaps are not keen to dispose of land and can avail of the tax-free benefits on the income. With more and more smaller farmers struggling, many people are taking this option.

“It has possibly led to a decline in the volume of land brought to market as people postpone the decision to sell,” he concluded.