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Is land purchase tax deductable?

  • 22-02-2016 2:00pm
    #1
    westcoast66
    Closed Accounts Posts: 211 ✭✭


    Just wondering here if anyone could answer this. We are looking at purchasing a few acres beside our home farm. Would this be tax deductible in the same way that buying a tractor or building a shed would be? Thanks!


Comments

  • #2
    MIKEKC
    Registered Users, Registered Users 2 Posts: 1,208 ✭✭✭MIKEKC


    westcoast66 wrote: »
    Just wondering here if anyone could answer this. We are looking at purchasing a few acres beside our home farm. Would this be tax deductible in the same way that buying a tractor or building a shed would be? Thanks!

    Afraid not, land considered an asset. Interest on loan would be deductible


  • #3
    blue5000
    Moderators, Society & Culture Moderators Posts: 12,753 Mod ✭✭✭✭blue5000


    Long term lease would be tax free.

    If the seat's wet, sit on yer hat, a cool head is better than a wet ar5e.



  • #4
    patsy_mccabe
    Registered Users, Registered Users 2 Posts: 11,123 ✭✭✭✭patsy_mccabe


    If it was tax deductible, it would send prices even higher.


  • #5
    Merrion
    Registered Users, Registered Users 2 Posts: 1,423 ✭✭✭Merrion


    Tax deductions for tractors/sheds are to allow for depreciation of asset value. Land doesn't depreciate (as far as the revenue are concerned - although they don't have any concept of briars or rushes)


  • #6
    Muckit
    Registered Users, Registered Users 2 Posts: 11,174 ✭✭✭✭Muckit


    Sorry op for jumping on band wagon. whats the situation with loan interest as an expense and long term leasing?

    ie say a farmer buys another few acres. Hasn't the cash flow to actually farm the bought bit. Can he still claim the loan interest as a farm expense if he decides to lease the bought bit for 5+years and still claim the income from lease tax free? (assuming the income is under threshold of course).


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  • #7
    ganmo
    Registered Users, Registered Users 2 Posts: 7,748 ✭✭✭ganmo


    how about this?

    farm set up as a ltd company that owns cattle + machinery

    owner of Ltd company leases land to the ltd farm = tax free?


  • #8
    ihatewinter
    Registered Users, Registered Users 2 Posts: 335 ✭✭ihatewinter


    Say I made earned 25k roughly per year. I bought land for 100k and had savings of 50k. So I needed a loan of 50k and had repayments of 1k per month. Would I be able to deduct loan repayments from income and then have a taxable income of 13k or would I still have to pay tax on the whole 25k.


  • #9
    Brown Podzol
    Registered Users, Registered Users 2 Posts: 1,847 ✭✭✭Brown Podzol


    ganmo wrote: »
    how about this?

    farm set up as a ltd company that owns cattle + machinery

    owner of Ltd company leases land to the ltd farm = tax free?

    Must be at arms length.

    Definition of qualifying lessee

    A company may be an eligible lessee provided it is not connected with or controlled by the qualifying lessor(s).

    Now if you were to lease your neighbours farm and he yours.:D


  • #10
    Milked out
    Closed Accounts Posts: 3,433 ✭✭✭Milked out


    ihatewinter wrote: »
    Say I made earned 25k roughly per year. I bought land for 100k and had savings of 50k. So I needed a loan of 50k and had repayments of 1k per month. Would I be able to deduct loan repayments from income and then have a taxable income of 13k or would I still have to pay tax on the whole 25k.

    Just the interest part of the loan repayment, capital is paid out of after tax income. At start of loan generally half amount of repayments are interest, towards end of loan most of repayment amount is capital so tax becomes bigger issue then


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