2% stamp duty was ‘unsustainably low’

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.

More in this Section

Opportunity to boost exports to Japan and South Korea

Treatment plan to control dry cow mastitis

Battery-powered tractor the way to go, say manufacturers

Recent weather allows opportunity for liming

Today's Stories

First licence granted to treat pain with cannabis

Barry Walsh quits Fine Gael role after ‘trial by media’

EU chiefs back Irish threat to veto Brexit trade talks

Violent teen ‘will harm girl he defiled’ if bailed


A towering achievement: Exploring Irish castles and beautiful buildings

Books that belong on the gardener's bookshelf

The domestic flash of Francis Brennan

John Wilson touring with music made with Rory Gallagher in Taste

More From The Irish Examiner