Dáil Éireann Debate, Thursday - 7 December 2023
182. Deputy Jackie Cahill asked the Minister for Finance if an individual who has agreed to purchase farm land, and who has the contracts signed in December 2023, but with a sale that will close in January 2024, still qualifies for 2023 agricultural relief based on the fact that they have an agreement in place in December 2023; and if he will make a statement on the matter. [54338/23]
View answerIt is my understanding that the Deputy's question relates to s. 33 of Finance (No. 2) Bill 2023 which amends s. 664 of the Taxes Consolidation Act 1997 (TCA). Section 664 provides for an income tax exemption for certain income arising from leasing of farm land.
I am advised by Revenue as follows:
There are a number of conditions to be satisfied before relief under s. 664 can be claimed. Subject to an upper limit, individuals who qualify for the relief are entitled to take a deduction in determining their total income for income tax purposes.
The lease must be a qualifying lease, that is, a lease of farm land which —
• is in writing or evidenced in writing,
• is for a definite term of 5 years or more, and
• is made on an arm’s length basis between one or more qualifying lessors and one or more qualifying lessees.
Section 33 of Finance (No.2) Bill 2023 contains a number of amendments to section 664 of the TCA. One of these amendments introduces a seven-year holding requirement in respect of farm land purchased by an individual pursuant to a contract entered into on or after 1 January 2024 for a consideration equal to the market value of the land at the date of the purchase. For contracts entered into on or after 1 January 2024, an individual must hold the farm land concerned for at least seven years before they are eligible for the income tax relief.
Where a taxpayer has entered into and signed a contract to purchase farm land in December 2023, but the sale is completed in (or after) January 2024, the seven-year holding requirement will not apply in respect of that purchase.
