Irish Farmers' Association (IFA) president Joe Healy has written to Minister for Finance Paschal Donohoe to ask that he reverse his decision to increase stamp duty on farmland from 2 per cent to 6 per cent.
The IFA has called for the Minister to provide in the Finance Act 2017 for the stamp duty rate to remain at 2 per cent for land that is purchased or transferred and used for farming.
Mr Healy said the decision to increase stamp duty on farmland runs counter to Government policy to promote land mobility and farm development.
“Decisions on agri-taxation taken by the Government over the last number of years have been very positive, contributing to farm development and restructuring. In particular, the outcome of the comprehensive review of agri-taxation in 2014 represented real progress, with the retention, enhancement and targeting of key measures to improve land mobility, farm restructuring and promote on-farm investment," he said.
“The increase in the rate of stamp duty for commercial property, including farmland, from 2 per cent to 6 per cent, is a very negative step in this context. It will significantly add to the costs of farm purchase and transfer, and will disincentivise land mobility. It will undermine opportunities for farmers to consolidate their farm holdings, to invest to improve their farm viability and will discourage lifetime transfers, as there is no stamp duty on transfers that occur on inheritance.”
Mr Healy said that although reliefs are available to farmers through the Young Trained Farmer Stamp Duty Exemption and the Consanguinity Relief, the majority of farmland transactions are subject to stamp duty at the full commercial rate.
The IFA has proposed that the stamp duty rate remain at 2 per cent for land that is purchased or transferred and used for farming.
“I believe this is a very reasonable proposal that would support continued land mobility and lifetime farm transfers. The reduced stamp duty rate would apply for active farmers only and would support improvements in the viability of the agriculture sector, underpinning its contribution to the achievement of FoodWise 2025 targets,” Mr Healy said.