Stamp duty hike to be discussed at cabinet meeting this morning

Further clarity on the much-talked about changes to stamp duty legislation announced in last week’s budget is expected today, as the cabinet meets to discuss the Finance Bill this morning.

Farmers’ concerns over the trebling of stamp duty on commercial, non-residential (including agricultural) land from 2% to 6% is expected to be addressed.

Although a full roll-back on the stamp duty increase is unlikely, AgriLand understands that the upper age limit, of 67 years-of-age, that applies to consanguinity (inter-family) relief, is likely to be removed or significantly altered.

Currently, consanguinity relief is available to close family members provided that the transferor is aged 67 or under. In such cases, a stamp duty rate of 1% applies on transfers by gift or sale.

Transitional measures on contracts that were signed before the budgetary changes were announced last Tuesday (October 10), are also expected to be discussed.

Farmers under the age of 35 who qualify as young trained farmers, will remain wholly exempt from stamp duty on farm transfers by gift or sale.

A potential move to abolish the 67-year-age limit on consanguinity (inter-family) relief would mean that fewer sales or transfers of farms would be levied with the 6% rate, than had been previously feared.

It should mean more transfers will qualify for the consanguinity relief rate of just 1%.

The Minister for Agriculture, Food and the Marine, Michael Creed, met directly with the Minister for Finance, Paschal Donohoe, in recent days to discuss the implications of the budget.

It is understood that changes to the consanguinity relief age limit of 67 were examined to ensure that all eligible family farm transactions are protected from the increase, ahead of the publication of the Finance Bill this week.

Concerns over the ‘draconian hike’ in stamp duty

Patrick Kent, president of the Irish Cattle and Sheep Farmers’ Association (ICSA), has said that the “draconian hike” in stamp duty calls into question the claim by the Taoiseach that he wants to support the people who get up early in the morning.

Farmers who take out long-term loans to buy the field next door or the next generation of farmers who take over farms are the definition of people who work hard and get up early in the morning.

“While the ICSA welcomes the continuation of the exemption from stamp duty for young trained farmers and the fact that the stamp duty does not apply to the consanguinity relief (stamp duty at 1%) for transfers of land involving farmers up to 67 years of age, the reality is that a stamp duty rate of 6% will cost farmers millions.

“The ICSA is demanding that age limits be abolished permanently for consanguinity relief and that the stamp duty trebling should not apply to agricultural land.

“Minister Creed knows that this is an incredibly backward step and the Department of Finance have again demonstrated an abject failure to understand how this tax is an own-goal,” he said.

Other farm organisations have also voiced serious concerns on the issue.

John Comer, president of the Irish Creamery Milk Suppliers Association (ICMSA), said: “We’ve a situation where a family farm perhaps buying a small piece of land – and taking out a loan over maybe 20 years to pay for the land – will be hit with a 6% stamp duty rate, with absolutely no refunds.

“I don’t think that any reasonable person could describe that as fair or even-handed. The ICMSA is calling for the inclusion of a provision in the Finance Bill that deals with this manifestly unfair aspect of the increase in stamp duty announced in the Budget.”

Meanwhile, Joe Healy, president of the Irish Farmers’ Association (IFA) has called on the Minister for Finance, Paschal Donohoe, to reverse the decision. He has proposed that the stamp duty rate remain at 2% for land purchased or transferred and used for farming.

I believe this is a very reasonable proposal that would support continued land mobility and lifetime farm transfers.

“The reduced stamp duty rate would apply for active farmers only and would support improvements in the viability of the agriculture sector, underpinning its contribution to the achievement of FoodWise 2025,” he said.

Colm O’Donnell, president of the Irish Natura and Hill Farmers Associations (INHFA) said: “It is unacceptable that where family farms are being transferred from one generation to the next – or indeed where young farmers have started Green Cert courses but have not yet completed them – find themselves discriminated against overnight.”