I had planned to buy some agricultural land in 2006 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 buy some agricultural land. I would like some advice on the likely taxes I may have to pay. I bought 10 acres of land several years ago and I paid very high stamp duty at a rate of 9 per cent, has this changed? Are there any other taxes I should be aware of, eg Capital Gains Tax?
The rate of stamp duty payable on agricultural land or commercial property has been reduced significantly in recent years. If you purchase agricultural land or other commercial property then stamp duty at a rate of 2 per cent currently applies. For example if you purchase land for €150,000 then stamp duty of €3,000 is payable.
Capital Gains Tax (CGT ) is payable on the profit made on the disposal of investment property ie the sale of any property other than your principal private residence. Budget 2012 introduced a CGT relief which is scheduled to expire at the end of this year.
This CGT relief will apply for the first seven years of ownership for properties bought before December 31, 2014, where the property is held for more than seven years, ie if a property is sold more than seven years after acquisition and a gain is made on the sale, relief will be given for the initial seven-year holding period. For example, if a property is purchased in May 2014 and sold in May 2024, the property would have been held for 10 years, so 70 per cent of any gain will be relieved from CGT and 30 per cent is taxable. This relief will apply to residential and non-residential properties (including agricultural land ).
Local property tax does not apply to agricultural land or commercial property.
This column is prepared by Dolores Gacquin, solicitor. Byrne Carolan Cunningham have offices in Athlone, Moate, and Lanesborough.
A person should always contact their solicitor to obtain legal advice specific to their own situation. The above column contains general information and cannot be relied upon as legal advice.