Stamp duty for consolidation.

Donald Trump

I was reading there about the stamp duty for consolidation. It appears that if you sell land,and then buy other land, within 24 months of each other (or up til Dec 2020) then you pay 0% stamp duty on the overlap plus 1% on the remainder.

So suppose you have a home farm of 100 acres and an "outfarm" of 100 acres. You are interested to buy a closer outfarm of 100 acres.

Suppose all land is 1k an acre (for ease of calculation).
If you just buy the closer land, you will pay 7.5% stamp duty (=7.5k). Total cost + stamp duty=107.5k.

However, suppose you sell one acre of existing outfarm. Then you buy the new outfarm. It seems that you can, in theory, claim consolidation relief which means you would pay 0% of 1k and 1% of 99k = 990.

So by selling single acre, you reduce your total bill to 99.99k

You have saved 7.51k (the price of 7.51 acres in this imaginary world) of tax by selling one acre. Although you do have one acre less.

Seems like a bit of a loophole? Perhaps Teagasc wouldn't issue the consolidation cert in this case?

J.O. Farmer

I assume the catch is you have to sell entire parcels and be consolidating either into a smaller number of parcels or closer to the home block.