Farmers have been given a major reprieve after Finance Minister Paschal Donohoe removed the age limit of 67 by which family members can sell land to each other, writes Daniel McConnell.
As expected, Mr Donohoe sought Cabinet approval this morning to reverse the steep increase in stamp duty for non-residential land for a small group of farmers inheriting land from family members, amid strong concerns from within Fine Gael and from farm lobby groups.
In last week's budget, Mr Donohoe announced that non-residential stamp duty was to increase from 2 per cent to 6 per cent with immediate effect.
The special Cabinet meeting was convened this morning to approve the changes to the budget in the Finance Bill, which will be published tomorrow.
Qualified farmers aged under 35, as well as those inheriting land from relatives aged 67 or younger, already get exemptions or concessions on the tax.
The difficulty has been caused for farmers who are not under 35 and are receiving a farm transfer from a relative aged over 67. Until last week, they paid stamp duty of 2 per cent, but under the change announced by Mr Donohoe they would have been liable for a duty of 6 per cent.
The Finance Bill memo brought to Government by Mr Donohoe set out the list measures announced in the Budget last week which will be published tomorrow when the Finance Bill is published.
In the budget, Mr Donohoe spoke of retaining the so-caled Consanguinity Relief where farms are transferred to younger family members. It encourages the early transfer of farms to younger generations.
In his Budget 2018 statement, Minister Donohoe announced an increase in the stamp duty rate for all non-residential property transactions, including agricultural land, from 2% to 6%.
Following discussions with Michael Creed, the Minister for Agriculture, Mr Donohoe has extended consanguinity relief for another 3 years and providing that the stamp duty rate applying under that scheme will be fixed at 1%.
Following further discussions with Mr Creed, Mr Donohoe has decided that the age rule for the consanguinity relief (of 67) will be removed.
This means that it will be possible for all gifts and sales of farmlands to closely related family members, who do not qualify for the 100% exemption available under the Young Trained Farmer scheme, to benefit from consanguinity relief at a stamp duty rate of 1%.
It is intended, however, that the question of an age limit will be revisited when the measure itself comes up for review towards the end of 2020.
The issue relating to transitional arrangements in respect of stamp duty on commercial property transactions and contracts entered into before October 11th 2017 will also be dealt with in the Finance Bill.