I had planned to buy some agricultural land during the Celtic Tiger years ago but I did not proceed as the price of land at the time was excessive. I believe that prices are now at a reasonable level and I would now like to invest. I would like some advice on the likely taxes I may have to pay. I understand that I will have to pay stamp duty? Are there any other taxes I should be aware of e.g. Capital Gains Tax, Capital Acquisitions Tax?
The rate of stamp duty payable on agricultural land or commercial property has increased in recent years. If you purchase agricultural land or other commercial property then stamp duty at a rate of 6% of the land value currently applies. E.g. if you purchase land for €150,000 then stamp duty of €9,000 is payable. Interest and penalties will also be payable if the stamp duty is not paid within the requisite time period.
Capital Gains Tax (CGT) is a tax payable on the profit made on the disposal of investment property i.e. the sale of any property other than your principal private residence. The rate of CGT is currently 33%. This tax will not affect the purchaser of property. It is a matter for the seller only.
Capital Acquisitions Tax (CAT) is only payable upon receipt of a gift or inheritance. In the event that you purchase land at full market value then no Capital Acquisitions Tax will be payable. If however, land or other property is transferred from one party to another for substantially less than its market value Revenue may treat this transaction as a gift, and CAT may be due. E.g. If you purchase land from a family member for €50,000 and the known market value of the property is €150,000 then Revenue will look upon this transaction as containing a gift from one relative to another of €100,000. The rate of CAT is currently 33%.