I hope to buy some agricultural land in the coming months. I would like some advice on the likely taxes I may have to pay. I understand that I will have to pay stamp duty, is this correct? 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 is 7.5% of the land value. E.g. if you purchase land for €200,000 then stamp duty of €15,000 is payable. Interest and penalties will also be payable if the stamp duty is not paid within the requisite time period.
However, under the Young Trained Farmer relief, a full relief from Stamp Duty is available if the purchaser of the agricultural land is under 35 years old and is the holder of a specified educational and training qualification. 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%.