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%.