Tax relief for landowners to lease land to sports clubs ‘difficult to justify’

A tax relief for landowners to lease land to sports clubs would be difficult to justify, according to the Minister for Finance, Michael Noonan.

Minister Noonan was responding to a parliamentary question this week from Fianna Fail TD Billy Kelleher.

Deputy Kelleher asked Minister Noonan to clarify if there are any incentives for landowners to lease their grounds to sports clubs on a long-term basis and, if not, whether he had any plans to introduce such measures.

The Minister for Finance confirmed that there are currently no tax incentives for landowners to lease land to sports clubs on a long-term basis.

Minister Noonan noted that the provision of such measures would be difficult to justify for a number of reasons, but added there is an alternative long-term leasing incentive currently available.

There is a similar incentive, however, which provides tax relief for certain income from the long term leasing of agricultural land under Section 664 of the Taxes Consolidation Act 1997.

“That tax relief has a very specific policy aim of accelerating land mobility and productivity through making additional agricultural land available to farmers on a medium to long term basis for husbandry purposes.

“The Deputy will note that my Department has published guidelines for tax expenditure evaluation which need to be considered in relation to any new proposals for tax expenditures,” he said.

Some of the key evaluation questions that need to be addressed as part of such evaluations, according to Minister Noonan, include:
  • What objective does the tax expenditure aim to achieve?
  • What market failure is being addressed?
  • Is a tax expenditure the best approach to address the market failure?
  • What economic effect is the tax expenditure likely to have?
  • How much is it expected to cost?

“Having regard to the above questions, my initial view is that it would be difficult to justify the provision of a tax relief for the type of land leasing suggested by the Deputy,” he said.