Farm Ireland
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Wednesday 21 November 2018

Young farmers face €70,000 Stamp Duty and Stocking Relief cap

The standard rate of Stamp Duty, at 6pc is now facing young farmers who buy land and the real impact of the change could push farm transfers back to inheritance to avoid this, Macra has warned.
The standard rate of Stamp Duty, at 6pc is now facing young farmers who buy land and the real impact of the change could push farm transfers back to inheritance to avoid this, Macra has warned.
Margaret Donnelly

Margaret Donnelly

Young trained farmers face a cap in the level of farming supports they can avail of at reduced tax rates.

In the Finance Bill, which was published last week, young trained farmers now face a €70,000 cap on Stamp Duty relief and stocking relief, a move which Macra President James Healy has described as "very disappointing".

According to the Finance Bill there is a lifetime cap of €70,000 on Young Trained Farmer Stamp Duty relief and 100pc Stock Relief and Succession Farm Partnership credits.

"(It's) Very disappointing that this has been introduced with no warning. It raises a number of questions in general but in particular for young farmers who have based their business plans on availing of these reliefs. I think this will have huge impact on the average farmer," he said.

Our understanding was that the Young Farmer Stamp Duty relief and Stock relief had been renewed to 2021 and there was no mention of a cap.

This now negates the benefit of the Young Farmer Stamp Duty relief as most farmers would have used most of the €70,000 relief, he said.

The standard rate of Stamp Duty, at 6pc is now facing young farmers who buy land, he said, and the real impact of the change could push farm transfers back to inheritance to avoid this, he warned.

Macra, he said, was seeking clarity on the consanguinity rate of Stamp Duty, of 1pc, and whether this will apply to young farmers for inter family transfers.

"We have to assume the 6pc rate of Stamp Duty will apply to a young farmer buying land, until we get clarification otherwise," her said.

The average farm is 33ha, he said, and with the average land price is just under €9,000/ac the average farm is worth €750,000. A Stamp Duty rate of 6pc, he said, would see young farmers facing a €44,000-45,000 bill.

"A young farmer will have to make the choice on whether to use the €70,000 for stock or land purchasing."

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