Site transfer family farm

salmonorcod

I have the option of a site on the home farm, but there is also a site for sale at reasonable money in a location close to the home farm that would actually suit me better I think location wise. All in with the purchase of the site plus a few extras needed to get that site up to spec there could be in the region of 50k in the difference in the sites.

Aside from the obvious financial saving what other advantages and disadvantages could there be to taking a site from the home farm?

If I was to inherit the farm land later it may lower my threshold for consagunity relief?

Anything else to consider?

Thanks in advance

Magic A

Planning would be a big one, in a similar situation to you and have heard that if they know your family have land in the area they would prefer you to build on that if the site is suitable. Might be worth asking a similar question on the construction forum.

salmonorcod

Thanks i have posted over there. But of a pain really, could you put up the argument it's not your land and it's not been offered to you so that's it?

AckwelFoley

salmonorcod wrote: »

If I was to inherit the farm land later it may lower my threshold for consagunity relief?

In a word yes. It doesn't lower the threshold, you're merely getting some inheritance before the rest..and hopefully many decades in between!

I would if I were you clarify exactly with your accountant how it will work but ultimately yes it decreases the amount you can receive tax free later in life

I bought a house off my uncle, my father gifted me his share of the value, so that will be knocked off the inheritance

kollegeknight

Do you need the value of the site for your deposit?

In our case, we didn’t so the site was valued at €6000 so split with my wife was worth €3000 each, then we went for planning on it.

Water John

OP don't know your circumstances but 50K is not to be sniffed at when embarking on such a project. You could take the 50K and as such see what you'd pay extra on your mortgage over 25/30 years.

salmonorcod

No I have the deposit saved. So you had the site transferred to you prior to going for planning?

salmonorcod

No I have the deposit saved. So you had the site transferred to you prior to going for planning?

kollegeknight

salmonorcod wrote: »

No I have the deposit saved. So you had the site transferred to you prior to going for planning?

I did, but I had already contacted a councillor and engineer to ensure It was a site suitable for planning. Transferred the site as agricultural/ site without planning.

I will be inheriting the farm and my threshold will be reduced by €3000.

J.O. Farmer

kollegeknight wrote: »

I did, but I had already contacted a councillor and engineer to ensure It was a site suitable for planning. Transferred the site as agricultural/ site without planning.

I will be inheriting the farm and my threshold will be reduced by €3000.

You can get €3,000 a year without reducing your threshold. I presume that's why it was valued at €6,000.

kollegeknight

J.O. Farmer wrote: »

You can get €3,000 a year without reducing your threshold. I presume that's why it was valued at €6,000.

Well I just based it on the dearest agricultural land around.

J.O. Farmer

kollegeknight wrote: »

Well I just based it on the dearest agricultural land around.

Lucky coincidence then. It's a small gift exemption.
https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/small-gift-exemption/index.aspx

salmonorcod

Also how does it work for bps? If you transfer before the application deadline you would have to take the area out of the claim?

Cavanjack

salmonorcod wrote: »

Also how does it work for bps? If you transfer before the application deadline you would have to take the area out of the claim?

No, sure you could claim on another mans land as long as he wasn’t claiming on it too afaik

salmonorcod

Wouldnt be ag land once planning granted on it I'd say

Cavanjack

salmonorcod wrote: »

Wouldnt be ag land once planning granted on it I'd say

Would still be at land if being farmed.

kollegeknight

Yes it was left in until we started building. Cattle could still graze it until building. We took it out the year we started building as we began in April.

salmonorcod

Sound so can be left in farm until you start digging so?

kollegeknight

salmonorcod wrote: »

Sound so can be left in farm until you start digging so?

We got to anyway. It was still being farmed until we started digging.

It was the same with my brothers site, we only took it out when he started building.

kerryjack

Have you looked at cost of construction, have you looked at houses in nearest village or town, are you building it on your own or with someone else, there is a lot to be said for a house in the nearest village or town that you can buy quickly and sell quickly if needs be, There is a lot of work and cost to getting one off houses completely finished inside and outside.

salmonorcod

Yeah have looked at buying it's a sellers market now covid seems to have driven demand through the roof.

Taking out the mortgage with herself and going to do some elements of the build ourselves. If we have the site in hand we will get it finished for the same price as a semi d in the nearest town with a garden you wouldnt swing a cat in so for the quality if life aspect alone its straight forward decision. Buying a site along with building could be more pressure.

Mooooo

If you may be getting the farm in time building elsewhere may be worthwhile, I don't think your primary residence will come into play in measuring assets for ag relief. A chat to an accountant may help

Magic A

Mooooo wrote: »

If you may be getting the farm in time building elsewhere may be worthwhile, I don't think your primary residence will come into play in measuring assets for ag relief. A chat to an accountant may help

Your primary residence (and mortgage) is included in the ‘farmer test’ where 80% of your assets need to be agricultural after the transfer to qualify for the Agri tax relief. Example in link below

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-reliefs/agricultural-relief/what-are-the-conditions-for-agricultural-relief.aspx

salmonorcod

Thanks for info I believe also when taking into account your asset portfolio house savings etc for agricultural relief it would be divided in half if your married.

salmonorcod

kollegeknight wrote: »

Do you need the value of the site for your deposit?

In our case, we didn’t so the site was valued at €6000 so split with my wife was worth €3000 each, then we went for planning on it.

That's interesting we dont need the site as deposit we have it saved so this could be a good way to go. Did you have to get it valued for stamp duty?