Simon Harris (Wicklow, Fine Gael) | Oireachtas source

It might be useful to put on the record the supplementary briefing material I have. It might give members an understanding of the rationale behind this. The definition of "agricultural land" is being amended to exclude buildings due to concerns for EU state aid compliance. The original definition already excluded farm houses and mansion houses unless they were derelict and unfit for human habitation. The relief up to now has been targeted at the sale of outlying land parcels with their replacement by closer lying land parcels in regard to the main landholding with a view to reducing the total number of land parcel and improving to productivity and viability of the holding. It would not have been expected that those transactions would involve many buildings, if any.

In the budget last month, the Minister announced that Teagasc certification guidelines are being amended to enable whole farm replacement to be eligible for the relief, subject to meeting the conditions laid down by Teagasc. The exclusion of buildings from relief in a whole farm replacement situation may be more relevant. However, from the commencement of the relief, farm houses and mansion houses have been excluded. An individual may be able to avail of capital gains tax principal private residence relief on the sale of the farm house. Furthermore, the non-farm house buildings may well be depreciating assets and so would not generate a chargeable gain. The exclusion of buildings is necessary to address concerns for EU state aid compliance and the Minister does not expect it to impact significantly on the operation of relief measures for those reasons.