As I have outlined in a number of PQ replies recently, the measure legislated for in section 68 of Finance Act 2017 (which was not a Budget measure) will allow a farmer to claim relief from stamp duty where he or she sells and purchases land for the purposes of consolidating an existing farm holding has been introduced, subject to a commencement order after a full consideration of any administrative or EU state-aid requirements.
For the relief to operate, there must be both a sale and a purchase of land within a period of 24 months of each other. Where other qualifying conditions are satisfied, stamp duty will only be paid to the extent that the value of the land that is purchased exceeds the value of the land that is sold. A reduced rate of 1% will be charged on the excess, if any, of the purchase value. If the sale takes place before the purchase, then relief will be given at the time of purchase. However, if the purchase takes place first, then stamp duty will have to be paid but can subsequently be refunded when the sale takes place.
A number of qualifying conditions must be satisfied before the relief can apply. The most important condition is that Teagasc must issue a certificate stating that a sale and purchase or an exchange of farmland was made for farm consolidation purposes. This is the certificate that is currently required in relation to the capital gains tax relief. The criteria to be used by Teagasc for this purpose and the information to be supplied to Teagasc are contained in guidelines published by the Minister for Agriculture, Food and the Marine:(www.agriculture.gov.ie/media/migration/formsdownloads/V12CGTGuidelinesfinal060315.pdf).
A purchaser of farmland must retain ownership of the farmland for a period of five years and must use the land for farming. Where any part of the land is disposed of before the end of this five-year holding period, the stamp duty relieved can subsequently be recovered by Revenue, or partly recovered as appropriate.
The measure will apply to all transactions which took place after 01 January 2018, so farmers who consolidate their holdings prior to the commencement of the relief will still be eligible.
I understand that the Department of Agriculture, Food and the Marine has recently made an application to the European Commission for State Aid approval of the measure and that a response is awaited.
It follows that, at this point, no definitive date for the commencement of the relief can be provided. I would however wish to emphasise that, subject to state aid approval and commencement, any eligible consolidation that takes place on or after 1 January 2018 and on or before 31 December 2020 will benefit from the consolidation measure introduced in section 68 of Finance Act 2017 (No 41 of 2017).