Business Farming

Monday 22 September 2014

Farmhouse values sparks war of words

Martin Ryan and Darragh McCullough

Published 16/01/2013 | 06:00

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Urban and rural TDs in angry exchanges over property tax

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The debate over what farmers should pay in property taxes heated up this week as TDs clashed over the best approach to valuing farmhouses.

It comes after the former president of the Institute of Professional Auctioneers and Valuers (IPAV) said auctioneers would be discounting farmhouses adjacent to farmyards by at least 50pc.

The IPAV's Tom Crosse said that farm residences that are part of farmyards would be "seriously discounted in their market value".

"If a stand-alone house was worth €200,000 our members would be putting a valuation of €100,000 on the equivalent farmhouse and maybe less in some cases," he said.

"We won't be allocating a high value to a residence attached to a farm, because they would be very hard to sell on their own. Many are adjacent to milking parlours, silage and slurry pits and there is also the issue of the right-of-way for access," he added.

If houses are valued at less than €100,000, they qualify for the lowest rate of property tax at just €45 for 2013.

However, the Society of Chartered Surveyors of Ireland (SCSI) said that farm houses situated away from the farmyard could be treated differently.

SCSI president, Roland O'Connell, said they had sought a meeting with Revenue to get clearer guidelines for assessing valuations.

"We are asking Revenue who is qualified to carry out a valuation. Each case is going to have to be assessed individually. We know of cases where valuations were put on farmhouses on notional one-acre sites for stamp duty on farm transfers," he said.

Meanwhile, Independent TD for Kerry South, Michael Healy-Rae, has advised farmers to value their homes at the minimum rate. He claimed that farmhouses, regardless of size or spec, would be worthless to anyone but the farmer when situated on a working farm.

However, the comments sparked criticism from Dublin Labour TD, Robert Dowds, who accused Deputy Healy-Rae of giving people irresponsible advice.

"The penalties for knowingly undervaluing a property for the property tax are up to €3,000," stated Deputy Dowds.

"Deputy Healy-Rae's advice to farmers to arbitrarily value their houses at the minimum level is ill advised and could get farmers into considerable trouble with the Revenue Commissioners," he added.

He said Deputy Healy-Rae's advice would almost certainly lead to shortfalls in funding for local services in rural Ireland.

"Urban homeowners are bearing the brunt of this tax and cannot be expected to come to the rescue when rural councils cannot afford local services because there is under valuation going on in farms around the country. Urban car owners are already subsidising counties such as Leitrim and Longford through the car tax," he said.

"Because the tax is based on market value, urban homeowners are already in line for higher property taxes than their rural counterparts."

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