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Tuesday 16 October 2018

Donohoe ready to row back on stamp duty for farm sales

Minister for Finance and Public Expenditure and Reform Paschal Donohoe. Photo: Steve Humphreys
Minister for Finance and Public Expenditure and Reform Paschal Donohoe. Photo: Steve Humphreys
Niall O'Connor

Niall O'Connor

The Government will this week perform a partial row-back on the changes in the Budget in the area of stamp duty following a backlash from farmers.

Finance Minister Paschal Donohoe was criticised after the Budget saw a 4pc increase in stamp duty for non-residential land.

But after holding talks with Agriculture Minister Michael Creed on Friday, Mr Donohoe is to introduce exemptions for farm families.

Under the original proposals announced on Budget day, the new 6pc rate of tax will not apply to inter-family sales if the seller is 67 years or younger.

Government sources last night confirmed that this threshold would be increased or even removed entirely.

One source said the move would only apply for a limited period, to encourage inter-family sales that were already under consideration to be completed.

Agriculture Minister Michael Creed. Photo: Colin O'Riordan
Agriculture Minister Michael Creed. Photo: Colin O'Riordan

The details of the changes are currently being worked out at official level and will be announced on Thursday.

The stamp duty changes were one of the few measures announced in the Budget that led to strong criticism.

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Some ministers are blaming the Department of Finance for the move. Mr Creed was caught off guard and initially claimed the 6pc rate of commercial stamp duty "does not apply to agricultural land".

He was then definitively contradicted by Mr Donohoe, who told the Irish Independent there should never have been any confusion about the issue.

"I was very much aware of the definition of non-residential commercial property and everything that is included in it," he said.

Mr Donohoe said he purposely referenced the young trained farmers' relief scheme, which exempts purchasers under 35 from normal stamp duty and the consanguinity rate of 1pc.

"I am, of course, aware of the concerns of people who represent farmers. What I have to do is point to the broader context of where we are."

The two ministers met privately to discuss the confusion in Cork on Friday, where the Cabinet was meeting.

Despite the changes, the vast majority of buyers of land sold on the open market will now be facing a stamp duty bill of 6pc.

Irish Independent

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