Holly Cairns (Cork South West, Social Democrats)
Link to this: Individually | In context | Oireachtas source

212. To ask the Minister for Finance if he will provide tax incentives to support the tillage sector, including to adjustments to tax-free land rental incomes to incentivise the leasing of land for tillage or horticulture purposes; and if he will make a statement on the matter. [21237/23]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

A number of tax reliefs are in place specifically to support the farming sector, for example, accelerated capital allowances for farm safety equipment, various stock reliefs, carbon tax relief on farm diesel, succession farm partnerships relief, VAT rebates on farm buildings.

In respect of the leasing of land for farming purposes (including tillage and horticulture), section 664 of the Taxes Consolidation Act 1997 provides for the exemption from tax of certain income earned from the long-term leasing of farm land. The relief was designed to encourage longer term leases of farm land, with the targeted policy objective of assisting with the mobility and productive use of agricultural land.

To qualify for this relief, a number of conditions must be met. One such condition is that the lessee must carry on a trade of farming on the leased land either solely or in partnership with a person or persons who is or are also qualifying lessees.

In this context, farming includes normal farming, market gardening, horse breeding, cattle dealing, fruit growing and any other form of husbandry, intensive or otherwise, which involves the use of the land or its produce.

Subject to an upper limit, individuals who qualify for the relief are entitled to take a deduction in determining their total income for income tax purposes. This deduction may be the total amount of rental profits or gains after the deduction of capital allowances, up to the maximum limit applicable (where the qualifying lease is taken out on or after 1 January 2015).

The applicable limit depends on the definite term of the qualifying lease. They are:

• €40,000 where all the qualifying leases are for 15 years or more;
• €30,000 where all the qualifying leases are for 10 but less than 15 years;
• €22,500 where all the qualifying leases are for seven but less than 10 years; and
• €18,000 where all the qualifying leases are for five or six years.