Farming

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Five-fold increase in long-term land leases

Long-term land leases have seen a huge increase over the last number of years, according to Kilkenny auctioneer, Joe Coogan.

The Castlecomer-based auctioneer says that he has seen his lettings based on a minimum of five years increase fivefold since 2009.

"Half of all our lettings this year are for a minimum of five years," said Mr Coogan. "This compares to as little as 10pc two or three years ago."

Mr Coogan believes that long-term leases had a bad name with landowners in the past.

"There were genuine fears of the land reverting back to the owner in a state of disrepair," he said. "But nowadays people get terms and conditions written into the lease. For example, all stock should be off the land by November 1 and probably not on the land again until the following March."

The auctioneer also referred to issues surrounding squatters' rights.

"Some landowners may have heard stories about people developing squatters' rights over the land. But this is not possible if a payment is being made on the land on a regular basis," said Mr Coogan.

relief

The tax relief available on five, seven and 10-year leases is also driving increased interest.

The first €12,000 of annual income from a lease is tax-free for a five-year lease, €15,000 in the case of a seven-year lease and €20,000 a year in a 10-year scenario.

"The advice that we have received is that even if this relief changes over the coming years, those who are already in the system will be safe," said Mr Coogan.

He is auctioning his first block of land to be let on a seven-year lease this week.

"The 10-year leases aren't as popular at all but good farmers like the shorter ones because it means that they can plan and invest in land for their own good," he added.

Indo Farming