Written answers

Thursday, 26 May 2022

Department of Agriculture, Food and the Marine

Official Engagements

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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177. To ask the Minister for Agriculture, Food and the Marine if he has had engagements with the Minister for Finance in relation to the ongoing issue with agricultural relief and the limit on the percentage of the land area of a farm that can be taken up with solar panels; and if he will make a statement on the matter. [26948/22]

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail)
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As the Deputy will be aware, taxation is primarily the responsibility of the Minister for Finance. However, both our Departments work closely to ensure it is consistent with Government priorities for the agri-food sector.

Agricultural property, such as farmland, benefits from tax relief under Capital Acquisitions Tax (CAT). The purpose of this relief is to facilitate succession and the intergenerational transfer of viable farm enterprises. The Report on the Tax Treatment of Solar Panels on Farmland, published in September 2017, examined the treatment of solar panels on farmland. It outlined recommendations including a number of possible options for the consideration of the Minister for Finance.

Measures contained in Budget 2018 and Finance Act 2017 gave effect to the Minister of Finance’s chosen option with CAT agricultural relief and Capital Gains Tax (CGT) retirement relief changed to allow the leasing of agricultural land for solar infrastructure to be classified as qualifying agricultural activity, subject to the panels covering no more than 50% of the holding.

The Report noted that while solar developments on farms will inevitably reduce agricultural production the 50% condition “will at least discourage passive farming which is possible in an unfettered approach and where there is no requirement to have agricultural activity”. It further noted that changing the law could potentially “fuel further speculation in the solar energy market as there may be pressure to engage with the farmers with larger holdings with the most viable solar project locations”.

My Department continues to work with the Department of Finance and stakeholders to ensure that tax strategy aligns with Government strategy and the needs of the agri-food sector and wider society.

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