Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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253. To ask the Minister for Finance if the agriculture sector will be exempt from the concrete levy due to the nature of its business and the large quantities of concrete that are required for large buildings and farmyards; and if he will make a statement on the matter. [53045/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I announced the new Defective Concrete Products Levy in my Budget 2023 speech last month. The introduction of this levy arises from a Government decision that a levy be imposed on the construction sector to contribute towards the cost of the Mica Redress Scheme, that was taken in November 2021.

Following the announcement of the levy on Budget day, and in light of subsequent feedback from industry participants and others, I have determined that the rate at which the levy will apply will now be set at 5%. It will also now come into effect on 1 September 2023, to allow more time for all stakeholders to prepare for its introduction.

I have also decided to remove pre-cast concrete products from the scope of the levy, so that it will now only apply to pouring concrete (aka ready-mix) and concrete blocks under two harmonised EU standards. The levy remains unchanged in all other respects, and does not exempt any particular sector, including the agricultural sector.

I acknowledge the necessity of concrete usage in that sector, however, as pre-cast products are now removed from scope the levy it will not apply to pre-cast products used in the agricultural sector, including those used for the covering of slurry stores or used around animal houses to retain slurry. Other precast products used in the agriculture sector such as floor slats for livestock are also excluded from the levy.

I was conscious when developing the levy that I had to balance the need to ensure some of the costs of the redress scheme are met from a source other than the Exchequer, while limiting the impact on inflation in the construction sector. It is essential that the entire cost of the redress scheme, which arises from the use of defective concrete blocks and other concrete products, is not borne in full by the Exchequer, and through it the Irish taxpayer.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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254. To ask the Minister for Finance if he has considered altering the 50% limit of agricultural land which may be leased for the purposes of generating solar energy while maintaining access to capital acquisitions tax relief; if he has considered doing so specifically with a view to increasing the limit, in line with the position of the Department of Agriculture, Food and the Marine regarding the single farm payment, or specifically with a view to seeing the calculation of land reflective of the resulting reduction in agricultural production, rather than the amount of land which is leased; and if he will make a statement on the matter. [53133/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, prior to Finance Act 2017 agricultural land which was leased for solar panels was not classified as qualifying agricultural property for the purposes of Capital Gains Tax retirement relief or agricultural relief from Capital Acquisitions Tax.

Following a review announced in Budget 2018, and in recognition of the then Government's commitment to facilitate the development of solar energy projects in Ireland, a revised approach was introduced whereby it is now possible for land leased for the installation of solar panels to be classified as qualifying agricultural property under certain conditions. A key condition is that the total area of land under lease and on which solar panels are installed does not exceed 50% of the total area of agricultural land.

While introducing this amendment, it was important that we did not lose sight of the fundamental principle which underpins our policy in relation to agricultural relief and retirement relief.

I recognise that allowing land leased for solar panels to be classified as qualifying agricultural property is an important element in encouraging solar energy projects. However, this must also be carefully balanced with the overarching objectives of this valuable relief which aims to encourage the inter-generational transfer of agricultural land which is being actively farmed.

My colleague, the Minister for Agriculture, Food & the Marine, Charlie McConalogue TD informs me that support under the Basic Payment Scheme (BPS) is payable upon activation of an eligible hectare per payment entitlement. In general terms an eligible hectare is one that is used for an agricultural activity or, where the area is also used for a non-agricultural activity, is predominantly used for such activities. An area is predominantly used for agricultural activity if that activity can be exercised without being significantly hampered by the intensity, nature, duration and timing of the non-agricultural activity.

While cases involving solar panels will be examined on an individual basis, it is currently envisaged that the area covered by the solar panels will be deemed ineligible for the purposes of claiming BPS. Furthermore, in line with the Department of Agriculture, Food & the Marine’s current approach on land eligibility, where the area of a parcel covered by solar panels is 70% or greater of the overall parcel, that parcel will be wholly ineligible. If less than 70% is covered by solar panels and the agricultural activity is not hampered by the presence of the solar panels, the area not covered by solar panels may be eligible.