Fine Gael TD Alan Farrell has raised a tax relief issue for landowners who have leased their land for the production of wind energy.
Farrell said that while relief on capital gains tax and capital acquisitions tax is available for landowners who have leased their land for the production of solar energy, it is not open for those leasing land for wind energy.
Minister for Finance Michael McGrath said that prior to Finance Act 2017, agricultural land which was leased for solar panels was not classified as qualifying agricultural property for the purposes of tax relief.
Following a review announced in Budget 2018, a revised approach was introduced whereby it is now possible for land leased for the installation of solar panels to be classified as qualifying agricultural property under certain conditions.
A key condition is that the total area of land under lease and on which solar panels are installed does not exceed 50% of the total area of agricultural land in the application.
Tax relief
This was part of the Climate Action Plan, where Ireland has committed to delivering up to 80% of the state’s electricity from renewable sources by 2030, to be achieved through the delivery of onshore wind, offshore wind and solar energy.
“Allowing land leased for solar panels to be classified as qualifying agricultural property is an important element in encouraging solar energy projects,” the minister said.
“However, this must also be carefully balanced with the overarching objectives of this valuable relief which aims to encourage the inter-generational transfer of agricultural land which is being actively farmed,” he added.
Minister McGrath said that if there were any further changes to the policy, that they should be carefully weighed up against the original intention of the reliefs in question.
“It remains important that the active farming of land be prioritised in line with the original policy intent of the reliefs,” Minister McGrath added.