Prior to Finance Act 2017, agricultural land which was leased for solar panels was not classified as qualifying agricultural property for the purposes of Capital Gains Tax retirement relief or agricultural relief from Capital Acquisitions Tax.
Following a review announced in Budget 2018, and in recognition of the then Government's commitment to facilitate the development of solar energy projects in Ireland, a revised approach was introduced whereby it is now possible for land leased for the installation of solar panels to be classified as qualifying agricultural property under certain conditions. A key condition is that the total area of land under lease and on which solar panels are installed does not exceed 50% of the total area of agricultural land.
While introducing this amendment, it was important that we did not lose sight of the fundamental principle which underpins our policy in relation to agricultural relief and retirement relief.
I recognise that allowing land leased for solar panels to be classified as qualifying agricultural property is an important element in encouraging solar energy projects. However, this must also be carefully balanced with the overarching objectives of this valuable relief which aims to encourage the inter-generational transfer of agricultural land which is being actively farmed.
My Department is aware of the report by the Oireachtas Committee on Agriculture, Food and the Marine’s on Agriculture and the Solar Industry, which recommended an appraisal as to the performance of the 50% limit on the total land area used for the installation of solar panels.
My officials continue to engage directly with representative bodies of the solar energy industry on such matters. My Department is also engaging with the Department of Agriculture, Food and the Marine, the Department of Energy, Climate and Communications and Revenue to further consider this issue.
