Farmers get extension to stamp duty reliefs

Measures to encourage the transfer of farms to the next generation and to promote the consolidation of farm holdings have been extended in the budget.

Minister for Finance Paschal Donohoe said he will extend consanguinity relief for three years. The relief allows farmers to benefit from a reduced rate of stamp duty of 1 per cent when they transfer agricultural land to a family member.

The relief had been due to expire at the end of this year but it will now continue in place until the end of 2023.

Other conditions under the relief regarding the qualifications of the recipient and the requirement that they work the land.

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The Minister also extended a separate measure that he put in place in the 2017 Finance Act to encourage the consolidation of smaller farms. The relief was introduced to encourage farmers to increase the efficiency and viability of their farms.

These transactions also benefit from the reduced stamp duty rate of 1 per cent.

Again, the relief had been due to expire on December 31st next. It will now run for another two years, until the end of 2022.

The minister said that this would align the next date for review of the relief with the next scheduled review of capital gains tax affecting agricultural holdings.

The Minister also adjusted upwards benefits for certain farmers.

Farmers who do not have to register for VAT because of the nature and/or sale of their business are called flat rate farmers.

To compensate such farmers for VAT that they must pay on purchases, they receive a “flat rate addition” to prices that they receive when they sell produce such as cattle, milk or cereals to companies that are registered for VAT.

Since 2017, this flat rate addition has been 5.4 per cent, having previously been 5.2 per cent from the start of 2013.

Mr Donohoe said this figure will now increase to 5.6 per cent.