It seems there’s no stop to demand for farm land coming into the winter months of the year and a new explanation for the phenomenon is now being offered.
High DIRT tax, low interest rates offered by banks and penal Capital Gains Tax are pushing investors toward land as an option.
Putting money literally into the ground makes sense in a lot of ways; it’s safe, a good bet and it has efficiencies in terms of DIRT and inheritance taxes. There are generally ways around most things, and land is proving a handy outlet at the moment.
Critically, however, it would seem the investors mostly flock to forestry land — there is huge, unslaked demand according to some agents, but difficulties in planning and a 50% drop in returns for non-farmers have taken the gloss off forestry being viewed as anything but a pension product.
Buying straightforward agricultural land means that non-farmer investors are taking a punt on asset value and tax efficiencies, however, it still leaves the best of returns to farmers who have the money to invest and to work the land — and judging by recent prices achieved, there are quite a few availing of this option. For the most part, the acquisitions appear to be self-funded, or with a small proportion of funding from the struggling institutions, according to sources.
High prices are, for the most part, paid for good quality, no-strings-attached land which can be put into action within hours of purchase. That is the ideal scenario and in those instance, the top money is paid — usually ranging upwards to €15,000, but very rarely above.
Just recently, a sum of €15,000 per acre was paid for land at Ballindangan, Mitchelstown, through Micheal Barry of Dick Barry and Sons Fermoy, bearing out his assertion that the land would do well before the sale.
In the heel of the hunt, it notched up an exceptional price and it’s believed the property sold to a neighbouring farmer, which probably goes some way to explaining the high price paid.
This week, the Dick Barry and Son agent is selling a much larger, 100-acre holding in east Cork at Ichtermurragh, Ladybridge. And again, it’s a clean land sale with some of the best arable land around, says Michael Barry.
Similar land in the locality has made €12,000 per acre recently, he says, but prior to auction in early December he’s prepared to give a realistic guide price for the farm -land of between €10,000 to €12,000 per acre.
Bounded on one side by a road and on the other by a river, the property is laid out in four good fields and has been used for a mix of tillage and grazing.
Good level, fertile land, it’s already generating good interest, he says:
“It’s a smashing bit of land, all in one block, and in four fields it’s only a mile from Ladysbridge and is dual purpose ground.
“There are no buildings and it's bounded on the lower end by a river and a country road on the other side. It has four gates from the road and a passageway through the farm — already there’s been good agricultural interest, but very strong from dairy farmers, Barry concludes.
The property will go to auction on Wednesday, Dec 11, at 3pm in the Garryvoe Hotel.
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