Budget 2020: stamp duty hike on farmland

The rate of stamp duty on commercial land, which includes farmland, is expected to be increased from 6% to 7.5% in Budget 2020.

Head of tax at ifac Declan McEvoy told the Irish Farmers Journal that if stamp duty goes up to 7.5% at midnight on budget night, anyone who doesn’t already have a legally binding contract will be subject to the new 7.5% rate.

If you’re on the verge of signing a binding contract, get it over the line today

"For every €100,000 transaction, it’s €1,500 extra. On a €500,000 transaction, it’s €7,500 in extra costs," he said.

“If you’re on the verge of signing a binding contract, get it over the line today or seek comfort that it will be binding," is McEvoy's advice.

“If you’re a young trained farmer, not buying land off a relative and you have used up your stamp duty relief threshold of €70,000 already, there could be an impact on you.”

Consanguinity relief

The last increase in stamp duty on commercial land from 2% to 6% in 2017 caused outrage among farmers, with some leniency subsequently introduced which allowed a higher threshold on age for land transfers under the consanguinity relief.

Consanguinity relief reduces the rate of stamp duty to 1% on land transfers between blood relatives. The number of people seeking blood relative or consanguinity relief on stamp duty for farmland more than doubled last year.

Applications rose from 622 in 2017 to 1,647 in 2018. The amount of money claimed under the relief also increased, from €1.2m to €22m.

Farmers can also avail of farm consolidation relief when making land purchases, which reduces the rate of stamp duty to 1%.

Additional reporting by Amy Forde

Read more

Young farmers claim over €16m in stamp duty relief

Farmers seeking family tax relief doubles