Leasing Land. SFP

minktrapper

What is the connection between leasing land and the sfp.

Sam Kade

minktrapper wrote: »

What is the connection between leasing land and the sfp.

The person leasing the land claims sfp and pays it back to the owner.

pedigree 6

Sam Kade wrote: »

The person leasing the land claims sfp and pays it back to the owner.

The sfp covers the rent.

So say the sfp was 200/ha. The rent would then be 200/ha and the sfp covers that.

minktrapper

Sam Kade wrote: »

The person leasing the land claims sfp and pays it back to the owner.

And what happens when the lease is up.Who owns the sfp then.Cap changes in 3 years time.

Sam Kade

pedigree 6 wrote: »

The sfp covers the rent.

So say the sfp was 200/ha. The rent would then be 200/ha and the sfp covers that.

So the man renting the land gets if free around here the tennant applies for sfp and pays it back to the owner on top of rent.

Sam Kade

minktrapper wrote: »

And what happens when the lease is up.Who owns the sfp then.Cap changes in 3 years time.

The owner loses the sfp because he isn't actively farming I suppose it goes back to the national reserve.

rangler1

pedigree 6 wrote: »

The sfp covers the rent.

So say the sfp was 200/ha. The rent would then be 200/ha and the sfp covers that.

Seperate transaction, some people are claiming to be getting the rent plus the SFP, I'd be hoping to work something like that....or maybe share the SFP.
i might have to think it out again,

pedigree 6

rangler1 wrote: »

Seperate transaction, some people are claiming to be getting the rent plus the SFP, I'd be hoping to work something like that....or maybe share the SFP.
i might have to think it out again,

And tax free. Happy days.:P

What's the new one?
If there is sfp with the land, say the land is 150/acre then add on the landowners sfp that the farmer of the land has to get and it ends up getting to 300/acre or even 400/acre tax free for the owner even though the farmer might only be paying 200/acre.

Probably pub talk.

minktrapper

Sam Kade wrote: »

So the man renting the land gets if free around here the tennant applies for sfp and pays it back to the owner on top of rent.

Is this true. He gets it free

minktrapper

Sam Kade wrote: »

The owner loses the sfp because he isn't actively farming I suppose it goes back to the national reserve.

Is this true.

rangler1

minktrapper wrote: »

Is this true.

That's the way it was in the lasT CAP reform for some landlords...either sell them or surrender them

rangler1

pedigree 6 wrote: »

And tax free. Happy days.:P

What's the new one?
If there is sfp with the land, say the land is 150/acre then add on the landowners sfp that the farmer of the land has to get and it ends up getting to 300/acre or even 400/acre tax free for the owner even though the farmer might only be paying 200/acre.

Probably pub talk.

Surely the tenant would have to get a percentage of the sfp for ensuring the farm is cross compliant,

pedigree 6

rangler1 wrote: »

Surely the tenant would have to get a percentage of the sfp for ensuring the farm is cross compliant,

I'm not sure what way people are working it. Tbh.
Only land I took had sfp taken by previous tenant and farming too long to qualify for national reserve.
I must be one of these forgotten farmers.

Grueller

A case locally here has a dairy farmer paying €300/ac plus SFP on a five year lease.

pedigree 6

Grueller wrote: »

A case locally here has a dairy farmer paying €300/ac plus SFP on a five year lease.

Was that in public auction?

J.O. Farmer

rangler1 wrote: »

Surely the tenant would have to get a percentage of the sfp for ensuring the farm is cross compliant,

I leased in entitlements last year for 66% of the value including greening. I paid up front in may and got my payments in October and December. I finished up roughly with the greening. It was done through an auctioneer.
I paid the auctioneer and I believe they held the money until the transfer was confirmed although that had nothing to do with me.
I believe that was a fair transaction with something for everyone.

Grueller

pedigree 6 wrote: »

Was that in public auction?

No private deal. A local 8 acre plot also made €375/ac for potatoes on conacre. That was auction.

rangler1

J.O. Farmer wrote: »

I leased in entitlements last year for 66% of the value including greening. I paid up front in may and got my payments in October and December. I finished up roughly with the greening. It was done through an auctioneer.
I paid the auctioneer and I believe they held the money until the transfer was confirmed although that had nothing to do with me.
I believe that was a fair transaction with something for everyone.

..

That's what I'd be hoping for too.....have to get a customer first

pedigree 6

Grueller wrote: »

No private deal. A local 8 acre plot also made €375/ac for potatoes on conacre. That was auction.

I'd only trust public auction figures tbh.
Everything else could be just revenue figures.

Bass Reeves

Some farmers that lease land are pure stupid. It's bit like the dairy expansion crack. Rent land at astronomical prices pay labour and end up working for nothing or else lads are spinning when last year they were cribbing about the milk price.

As a beef farmer if I want to get bare land for 100/ acre and be able to claim payments on it myself. Even present SFP rentals on payments over 300/Ha they are only clearing 6-10 euro/ 100 on extra payments. They pay up front if they make a mistake with nitrates or area declared etc they will suffer the hit on the higher payments. The cost of the money over 6 months is 3-5% anyway.

Committing to a long-term lease with all the risk attached and paying stupid money will all end in tears. Lads never factor in sickness, accident etc when taking these leases. The whole point of tax free leasing was to reduce the point of leasing. If I was minster of finance I would do away with the relief. I know a lot of lads taking the lease are betting that in 2019 the same will happen as in 2015 and SFP will revert to them. But lessors are inserting a clause that a SFP hast to be returned after lease period ends.

Lads are often on about a dairying bubble I be more worried about a leasing bubbles

Grueller

pedigree 6 wrote: »

I'd only trust public auction figures tbh.
Everything else could be just revenue figures.

I know the figures pedigree, it's very very close to home iykwim.

minktrapper

If land is rented on a yearly basis and the client that rents the land use's the land for nitrates (getting rid of slurry)what happens to the sfp.

Username John

The rent received in the lease over 5+ years is tax free.

The proportion of the SFP paid back to the farmerettibg the ground I s seperate, I have heard figures around 66% - 75%
I don't believe this SFP income is tax free - only the lease payment element is tax free...

The lease must be stamped by the revenue and stamp duty paid, so they might be wise to lads saying rent is 400/acre with 200/acre SFP thrown in for free... but not sure how it works in practice, or what checks they might have...

minktrapper

Username John wrote: »

The rent received in the lease over 5+ years is tax free.

The proportion of the SFP paid back to the farmerettibg the ground I s seperate, I have heard figures around 66% - 75%
I don't believe this SFP income is tax free - only the lease payment element is tax free...

The lease must be stamped by the revenue and stamp duty paid, so they might be wise to lads saying rent is 400/acre with 200/acre SFP thrown in for free... but not sure how it works in practice, or what checks they might have...

If you rent out land on a yearly basis as in conacre what happens to the sfp.

Username John

minktrapper wrote: »

If you rent out land on a yearly basis as in conacre what happens to the sfp.

My understanding is, if you let out land on 11 month lease you can still claim the SFP yourself... ?

I wouldn't be sure if that tho, so don't take my word for it...

zetor 4911

Username John wrote: »

My understanding is, if you let out land on 11 month lease you can still claim the SFP yourself... ?

I wouldn't be sure if that tho, so don't take my word for it...

The only person entitled to claim the SPS is the farmer who is actively farming the lands.

Sam Kade

zetor 4911 wrote: »

The only person entitled to claim the SPS is the farmer who is actively farming the lands.

True but any lease I've heard of they pay it back to the landlord or else it's built into the lease price. If a farmer had 20k sfp on 120 acres and charging 200/acre for the lease the man leasing would have the land for 4K. I doubt many farmers would be leasing their land for a 4K gain. They would keep a few cattle and keep claiming their sfp then there would be farmers complaining about them calling them dog and stick farmers, you can't win.

Aska

Personally I have the sfp included in the rent agreement. It's €104 an acre here and i have the rent to 3 different joining farms at €320 p/a. So the sfp is rounded to €100. There is talk of a review nationally in maybe 2019 so I might loose that €100 altogether.

The rents are split between Feb & Aug. I get paid in those months the sfp is paid as part of that. So whenever the actual payment is made the farmers in questions keep it (as they have already paid).

minktrapper

If you keep some land in you're own name and stay farming it. Will all the entitlements/sfp return to you at the end of the term.

zetor 4911

minktrapper wrote: »

If you keep some land in you're own name and stay farming it. Will all the entitlements/sfp return to you at the end of the term.

The entitlements will return to the owner at the end of the lease even if the owner of the entitlements does not remain farming.

minktrapper

zetor 4911 wrote: »

The entitlements will return to the owner at the end of the lease even if the owner of the entitlements does not remain farming.

How sure of this are you.

zetor 4911

minktrapper wrote: »

How sure of this are you.

Insert a clause into the lease (land lease) that the entitlements are to return to the lessor at the end of the lease or earlier if the new CAP comes in before then.

yewtree

zetor 4911 wrote: »

The entitlements will return to the owner at the end of the lease even if the owner of the entitlements does not remain farming.

I don't think that's right, once the land owner leases the land he is no longer an active farmer. Also as far as I am aware they don't have right to expect entitlementsome returned in new cap

zetor 4911

yewtree wrote: »

I don't think that's right, once the land owner leases the land he is no longer an active farmer. Also as far as I am aware they don't have right to expect entitlementsome returned in new cap

I didn't say they will have a right to new entitlements in the new CAP what I am saying is that the current entitlements will return to the owner before the next CAP as happened in the last CAP. The rules for the next CAP are anyone's guess at this stage.

rangler1

Must be still some dairy expansion going on in the North, I've had 2 or 3 inquiries from across the border, one guy said he was two hours away, so I told him I wasn't leasing it to farm for someone else