The Government is reviewing the tax treatment of farmland used to install solar panels, Minister for Finance Paschal Donohoe told the Dáil before the summer recess. An interdepartmental group established on this issue is due to report to him “soon”.

“I will consider the report’s recommendations in the context of Budget 2018/Finance Bill 2017,” Minister Donohoe said.

Last October, the Revenue advised that solar farms would not qualify for agricultural tax relief.

The scheme provides a 90% capital acquisition tax (CAT) discount on land transferred through gifts or inheritance, and is essential in passing on viable farms to the next generation.

The review comes as many farmers who signed options with solar developers in recent years see them come up for renewal.

“I wouldn’t bother with it if the tax relief wasn’t there,” a Co Cork farmer with a two-year option (agreement) on 24ac of land told the Irish Farmers Journal. His options give the developer a right to establish a solar farm on his land for 25 years at any point, and is up for renewal in November. The current tax status means the CAT rate would be 33% instead of 3.3% should he transfer the land while the solar panels are in place.

Like many farmers with solar options, he sees nothing happening as developers have signed more deals than the national grid can carry, and he cannot invest because the developer could move in at any point.