Written answers
Thursday, 17 January 2019
Department of Finance
Tax Reliefs Application
Denis Naughten (Roscommon-Galway, Independent)
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61. To ask the Minister for Finance if the tax relief for long-term leases of farmland to landlords who provide tenants with long-term leases of accommodation will be extended; and if he will make a statement on the matter. [2070/19]
Paschal Donohoe (Dublin Central, Fine Gael)
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I understand that the Deputy is referring to a proposed extension to the existing exemption of certain income from long-term leasing of farm land to include rent received by a lessor in respect of a residential property.
Section 664 of the Taxes Consolidation Act 1997 provides for the exemption of certain income from leasing of farm land, where the land is let under a qualifying lease, by a qualifying lessor, to a qualifying lessee.
A qualifying lease must have a minimum definite term of five years or more to qualify for the relief. Following Finance Act 2014, a qualifying lessor is exempt from income tax on progressively increasing amounts linked to lease duration as follows:
| For leases entered into: | Between 1 Jan 2007 and 31 Dec 2014 | On or after 1 Jan 2015 |
|---|---|---|
| Lease term | € | € |
| 5yrs or more (but less than 7yrs) | 12,000 | 18,000 |
| 7yrs or more (but less than 10yrs) | 15,000 | 22,500 |
| 10yrs or more (but less than 15yrs) | 20,000 | 30,000 |
| 15yrs or more | N/A | 40,000 |
For the purposes of the relief, the definition of “farm land” includes a building “other than a building or part of a building used as a dwelling".
This relief was designed to encourage longer term leases of farm land in recognition of the advantages of long-term leasing over the short-term conacre system. The 2014 Agritaxation Review recognised the key role of long-term leases in assisting with the mobility and productive use of land, and suggested a number of enhancements to the relief which were implemented in Finance Act 2014.
As the extension proposed by the Deputy would be outside the targeted policy objective of the relief, I do not propose to make such a change to the measure at this time.
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