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Saturday 21 April 2018

Stamp Duty clarity for farmers who have bought land recently

Minister for Finance Pascal Donohoe. Photo: Kyran O'Brien
Minister for Finance Pascal Donohoe. Photo: Kyran O'Brien
Ciaran Moran

Ciaran Moran

The Minister for Finance Pascal Donohoe has clarified in the Dail how much Stamp Duty farmers, who bought land recently but are still waiting for the transactions to go through, must pay.

There was much confusion after Budget Day when the Minister for Agriculture Michael Creed said the increased Stamp Duty levels would not apply to farm land.

However, the Minister for Finance said all agricultural land sales are included in the hike in commercial Stamp Duty, which jumped from 2pc to 6pc in the Budget.

Further confusion reigned for farmers who had bought land before the Budget and who were waiting for the deal to go through - as to whether they would pay the old rate of 2pc or the new rate of 6pc.

The Minister for Finance said in the Dail this week that it is the Government's the intention that anyone who has signed a contract for a land transaction avails of the previous 2pc rate.

He made the remarks after Sinn Fein Finance Spokesperson Pearse Doherty said he was aware of one person who has been invoiced by revenue for the increased rate after he purchased a large quantity of land to ensure a farm was commercially viable.

“The last transaction went through on budget night, and an invoice was generated by Revenue for 6pc stamp duty.

“The individual does not have the additional €10,000 or €11,000 to pay the 6pc rate.

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“As the deal was concluded before March 31, the family will be charged 2pc, but they have to pay it now, and there will be a late penalty if they do not.

Doherty called on the Minister to speak to Revenue to ensure there are no late penalties for individuals who have purchased land and face a 6pc levy until the Finance Bill goes through.

"It is really important so that people are not in default of their tax liabilities.

“They have only four weeks to pay that tax liability.

“It is important for people who entered into genuine transactions and are now caught out because it is not possible to get a loan to cover the additional 4pc”, he said.

Responding Minister Donohoe said that he was well aware of the gravity of any decision that he made on taxation.

“I am crystal clear about it. I go back to the broad point that this rate of 2pc was one-third of what it had been a number of years ago. If we fail to use periods like this to bring rates like that back to a more sustainable level, we create the seeds of a tax system that is unable to cope with difficulty in the future. That is why I made this change,” he said.

“It is our clear intention that anyone who has signed a contract for a land transaction avails of the 2pc rate.

“If the Deputy has a concern about an individual transaction, I ask him to share it with me so that I can look into it and ensure it is dealt with correctly from a policy point of view.

“ I am sure the Revenue Commissioners will be aware of it too,” he said.


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