Buying Entitlements

agriman

Sorry if this has been asked before but is it still possible to buy entitlements or is this something that was only an option up to last year?

It's for a person with around 15ha with no entitlements. If it is still possible is it straight forward to buy them and could it be completed before the BPS closing date?

Any suggestions would be appreciated.

sea12

Yes you can buy them if you can find them but chances are small that you could find them as seller loses 50% if they sell.
You have a better chance of leasing them and yes you still have time for that before 16th may.

MIKEKC

sea12 wrote: »

Yes you can buy them if you can find them but chances are small that you could find them as seller loses 50% if they sell.
You have a better chance of leasing them and yes you still have time for that before 16th may.

It would appear that they are making 60% of value. Add auctioneers fee + income tax and very little left for your trouble. Can't understand people paying so much

J.O. Farmer

MIKEKC wrote: »

It would appear that they are making 60% of value. Add auctioneers fee + income tax and very little left for your trouble. Can't understand people paying so much

Seems like a no brainer if you your farming land with no entitlements. You pay out say 66% including fees. You get 100% in December that's a 50% return on investment. What other form of on farm investment will give you that return in such a short space of time.
income tax is not a factor to consider as the leasing is allowed as an expense so only the profit is liable for tax as part of the farm profits.

Jack180570

MIKEKC wrote: »

It would appear that they are making 60% of value. Add auctioneers fee + income tax and very little left for your trouble. Can't understand people paying so much

The 60% is for leasing is it not?
60% of face value..

What are the 250e entitlements making to buy?

Bass Reeves

Leasing is dependent on value generally you are left with 100/HA. Was looking for a few and was quoted 66% for 340 valued one and 70% for ones about 420. There was a tenner /HA extra. Low value ones less than 100/HA are trading at 50% of face value but hardly worth the effort.

MIKEKC

J.O. Farmer wrote: »

Seems like a no brainer if you your farming land with no entitlements. You pay out say 66% including fees. You get 100% in December that's a 50% return on investment. What other form of on farm investment will give you that return in such a short space of time.
income tax is not a factor to consider as the leasing is allowed as an expense so only the profit is liable for tax as part of the farm profits.

You pay out 66% of say entitlement value at e100 that leaves you with e34. At 50% tax that leaves you with e17 per entitlement. It would obviously leave you with a few more euro if paying tax at lower rate. Still a very small return for your trouble

J.O. Farmer

MIKEKC wrote: »

You pay out 66% of say entitlement value at e100 that leaves you with e34. At 50% tax that leaves you with e17 per entitlement. It would obviously leave you with a few more euro if paying tax at lower rate. Still a very small return for your trouble

Yeah but they'd be very low value entitlements. As bass said you're profit would be about €100 leaving €50 after tax.
Also if you go to the trouble of leasing in entitlements you'll probably lease more than 1 and it's the same trouble to get 10 as 1.
A couple of hours will probably sort it. it'll be the best paid work you do all year unless you're very well paid off farm.

MIKEKC

J.O. Farmer wrote: »

Yeah but they'd be very low value entitlements. As bass said you're profit would be about €100 leaving €50 after tax.
Also if you go to the trouble of leasing in entitlements you'll probably lease more than 1 and it's the same trouble to get 10 as 1.
A couple of hours will probably sort it. it'll be the best paid work you do all year unless you're very well paid off farm.

Yes you would need a good few hectares and preferably get high value entitlements

Tomjim

if you don't buy them you won't have entitlements post 2019, if you do you will have entitlements worth €250

Is the above statement correct?

J.O. Farmer

Tomjim wrote: »

if you don't buy them you won't have entitlements post 2019, if you do you will have entitlements worth €250

Is the above statement correct?

The answer is nobody knows. The current agreement runs to 2019. While it might be expected there will be some sort of payment scheme post 2019 it's not sure that the entitlements owned now will transfer over or at the same value.