Farm Ireland
Independent.ie

Saturday 29 April 2017

Land of opportunity in Tipp

A view towards the Galtee Mountains from the property which includes a registered 144ac commonage share which is delivering over €34,000 per annum in farm payments
A view towards the Galtee Mountains from the property which includes a registered 144ac commonage share which is delivering over €34,000 per annum in farm payments
Jim O'Brien

Jim O'Brien

We often hear of land that is suitable for any type of farming - for tillage, grazing, equestrian or planting, but what about a farm that's eminently suitable for 'paper' farming?

An interesting mountain property that sold recently at Black Road where Tipperary, Cork and Limerick meet between Skeheenarinky and Kilbehenny in the Galtee mountains made in excess of €260,000.

According to Eamonn O'Brien of CCM this property will more than pay for itself and keep its asset value, all the owner has to do is make sure the paperwork is in order.

Comprising 14ac that was for sale outright it also comprised a registered 144ac share of commonage delivering €34,314 in farm payments with a possibility of more.

Mr O'Brien explains that the previous owner used the property to finance a few domestic projects and with its work done, he wanted to move it on.

"This piece of ground can make money in a variety of ways," the Mitchelstown auctioneer explains.

"Based on a 15-year payment the premiums at over €34,000 will more than pay a mortgage.

"There is also the potential for €5,000 GLAS payments or the opportunity for a new farmer to attract Installation Aid," he said.

Based on the current tax breaks for letting land, the property could deliver a handsome tax-free income over a 15-year period.

There is also an opportunity for Agricultural Relief for property transfer purposes.

In valuing the assets for sale, Mr O'Brien says the 14ac of land at €5,000/ac is worth €70,000 and the 144ac of commonage is worth €500/ac making €72,000.

The basic farm payment of circa €30,000 pa would be sold for three times its annual value making €90,000.

This adds to a total value of €232,000 and while a sale price of €240,000 was proposed, it closed in advance of €260,000.

"I think that a client looking to borrow for any investment like this would make a good case for a mortgage," said Mr O'Brien.

"It could be viewed as a pension plan or a straight investment.

"The sums certainly add up if the new owner were to borrow €240,000 over 15 years at 4.5pc interest the annual repayments will amount to €22,347.

"If you take it that the entitlements for 2014 came to €34,314 then it is clearly a profitable investment leaving one with a steady income and a very saleable asset."

Mr O'Brien said three bidders fought it out in the final stages of the private treaty sale and the property finally went to a man from the midlands.

Commonage auction

Meanwhile, last Thursday Mr O'Brien and CCM concluded the sale of around 72ac of land that includes 19ac of owned land and 53ac of commonage.

Located at Carriganima, Co Cork, about 8km west of Macroom, two lots of 2.5ac each sold prior to auction and the remaining 66ac sold at auction for €94,000.

Indo Farming



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