by Stephen Cadogan
Purchasers of land who paid the deposit on the assumption of 2% stamp duty are being backed by ICMSA in their claim to qualify for the 2% duty, even if final sale documents have not been signed.
ICMSA farm business spokesman Lorcan McCabe said this is one of farmers’ concerns, after the budget increase in stamp duty on non-residential property from 2% to 6%.
However, Finance Minister Paschal Donohoe has made it clear that stamp duty will be chargeable at the lower rate of 2% only where a binding contract was in place before October 11, 2017, and the subsequent deed of conveyance or transfer is executed before January 1, 2018.
Referring to the new year deadline, Mr McCabe said farm transfer and sale delays outside of the control of the farmer often occur.
“It would be grossly unfair if a farmer suffered an effective 4% penalty due to circumstances absolutely outside of his or her control”.
Meanwhile, measures in the Finance Bill (usually enacted before the end of December) will result in 1% stamp duty for inter-family farm transactions, with the upper age limit of 67 for the transferor removed for three years.
But those benefiting, and who make a stamp duty return to Revenue in relation to a transfer or conveyance of agricultural land before enactment of the Finance Bill, must pay the 6% duty, but will be able to claim a refund of the 4% difference after the Finance Bill is enacted, provided the deed of transfer or conveyance is executed before January 1.
The 100% stamp duty exemption continues for qualifying young trained farmers.
Minister Donohoe has told the Dail he was fully aware of all of the consequences of the budget stamp duty rise.
“I accept that it causes difficulty, concern and increased cost for people, but at 2% the rate was unsustainably low.
“If we cannot use periods like the present to change rates like this, the tax base will continue to be too narrow.”
However, he also admitted that a breakdown of receipts from non-residential property stamp duty is not presently available.
Therefore, for example, it is hard to know how the stamp duty increase will affect farmland transfers (including options over land; interests in land (such as wayleaves or other rights to lay cables, pipes, wires or other conduits); and easements (a right over someone’s property such as a right of way).
Stamp duty is payable to Revenue 30 days after execution of the deed of conveyance or transfer on sale, usually when the purchaser pays the full consideration to the seller.