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(Speaker Continuing)
[Deputy Martin Kenny:   ] That is what was encouraged but now the Government has changed the policy and will allow people to live to 100 while keeping the land. The day before they pass on to the Lord, they can transfer the land back without any stamp duty being imposed. The very policy the Government set out to achieve has now been turned on its head. I stand to be corrected, but it suggests it was not thought through in the first place. That is the first issue.
The main issue here and what my question really relates to is the following. While I accept the issue about young farmers and qualified farmers, I spoke to a man yesterday evening who is milking 65 cows and who wants to buy 40 acres of land beside his farm. To buy that land he will now have to pay 6% stamp duty. He gets up early in the morning and works very hard, pays his taxes and produces the goods. I listened to the exchanges earlier and I ask the Minister to look at what he is doing for society compared to Apple with its tax deal and the banks, which pay no tax on their profits. It seems totally unfair. I ask the Minister to address that particular point.
Deputy Paschal Donohoe: This is a tax rate which stood for most of our recent history at 9% before going to 6% and then down to 2%, where it has remained for the past number of years. I assure the Deputy that when I made the decision, I was fully aware, as with any decision, of all of the consequences of what I was putting to the Dáil on budget night. I accept that it causes difficulty, concern and increased cost for people, but at 2% the rate was unsustainably low. If we cannot use periods like the present to change rates like this, the tax base will continue to be too narrow. That is why this decision has been made. It is my understanding that the Sinn Féin budget proposal included a proposed change to stamp duty on commercial property. The party was proposing what we did on budget day.
Deputy Martin Kenny: That was for commercial property, not agricultural land.
Deputy Paschal Donohoe: The Deputy will have been as aware as I am of the definition of "commercial property". In putting the point to me about relief, he neglected to state that we have brought the relief in at 1% with no age limit for the next three years and that at the end of three years, we will revert to an age limit. The way in which we are looking to maintain the incentive is by having this window in place for three years only. At the end of the three year period, it will revert to an age limit fixed by the Minister of the day. I did that in recognition of the concerns raised with me in relation to the integrity of the family farm. A measure like this was justified, which is why it is included in the Finance Bill.
Deputy Martin Kenny: The Minister fails to accept the gravity of the situation. The average farm income in this country is half the average industrial wage, which is the issue here. Farmers are struggling to survive. In many cases and where they depend on the farm alone, the only way to survive is by expanding. To expand, they must buy land beside them. This aspect is recognised and the Minister for Agriculture, Food and the Marine raised the issue with the Minister for Finance. It is clear that he said it was not just for the young farmer or where a farm was in a family, but it was also an issue for the person who wants to expand his or her holding. There are all kinds of schemes in place, including TAMS, to assist farmers in that regard, yet the Government comes back and takes away with the other hand. It smacks of something that was not thought through.
Deputy Pearse Doherty: I echo my colleague's points. Agricultural land should be exempt as proposed in the amendment we supported on budget night when the resolutions went through. I wish to refer to a tangential issue relating to this by which many individuals may be caught. Certainly, I am aware of one person who purchased a large quantity of land to ensure a farm was commercially viable. The last transaction went through on budget night and an invoice was generated by Revenue for 6% stamp duty. The individual does not have the additional €10,000 or €11,000 to pay the 6% rate. As the deal was concluded before 31 March, the family will be charged 2%, but they have to pay it now and there will be a late penalty if they do not. I ask the Minister to speak to Revenue to ensure there are no late penalties for individuals who have purchased land and face a 6% levy until the Finance Bill goes through. It is really important so that people are not in default of their tax liabilities. They have only four weeks to pay that tax liability. It is important for people who entered into genuine transactions and are now caught out because it is not possible to get a loan to cover the additional 4%.
Deputy Michael McGrath: I welcome the change from the budget day announcement with the publication of the Finance Bill. There are farmers who had not transferred farms to the younger generation prior to age 67 and so had failed to avail of the consanguinity relief. They have now been provided with the opportunity to have the transfer go through at the 1% rate, which will hopefully happen. A related point is that there is a CGT exemption for the sale of certain farmland where the proceeds are used to acquire other farmland for the purposes of consolidating the overall farm land holding. In those limited circumstances where the CGT exemption applies, will the Minister consider applying an exemption to the stamp duty increase also?
Deputy Paschal Donohoe: Regarding Deputy Martin Kenny's points, I am well aware of the gravity of any decision that I make on taxation. I am crystal clear about it. I go back to the broad point that this rate of 2% was one third of what it had been a number of years ago. If we fail to use periods like this to bring rates like that back to a more sustainable level, we create the seeds of a tax system that is unable to cope with difficulty in the future. That is why I made this change.
I ask Deputy Doherty to give me the details of the individual to whom he referred. I will look into the matter on his behalf. It is our clear intention that anyone who has signed a contract for a land transaction avails of the 2% rate. If the Deputy has a concern about an individual transaction, I ask him to share it with me so that I can look into it and ensure it is dealt with correctly from a policy point of view. I am sure the Revenue Commissioners will be aware of it too.
Deputy McGrath referred to the farm consolidation piece. There is a capital gains tax for that particular area where transactions take place to consolidate farms. I have not looked at the issue to date because the overwhelming number of the contacts I received related to the provision of clarity on the applicable stamp duty rate where contracts are already signed and the consanguinity issue, which I have dealt with in the Finance Bill.
Brexit Issues
11. Deputy Michael McGrath asked the Minister for Finance the work that the Revenue Commissioners are undertaking in preparation for Brexit; the arrangements being considered for the Border area in view of the likelihood of the UK leaving the customs union; and if he will make a statement on the matter. [44695/17]
15. Deputy James Browne asked the Minister for Finance the steps he has taken to date and plans to take in preparation for post Brexit customs checks at ports here specifically Rosslare Europort; and if he will make a statement on the matter. [44711/17]
40. Deputy David Cullinane asked the Minister for Finance the reason his predecessor refused to publish the report prepared for him by the Revenue Commissioners on the impact of Brexit on customs. [44712/17]
73. Deputy Joan Burton asked the Minister for Finance the steps the Revenue Commissioners have taken to identify possible customs posts on the border; the locations that have been examined for these posts; and if he will make a statement on the matter. [44757/17]
Deputy Michael McGrath: I wish it to be absolutely clear that the Fianna Fáil position on a hard border is that we do not support it. Our objective, which we share with Government, is that there should be no hard border on the island of Ireland. However, I want to ask the Minister about the work of Revenue, whose representatives were before the finance committee in May. At the committee, they gave extensive evidence on the advance or preparatory work being done. I seek an update on that in light of recent political developments.
Deputy Paschal Donohoe: I propose to take Questions Nos. 11, 15, 40 and 73 together.
Like all Government agencies, Revenue is actively engaged in examining a range of scenarios in order to support Ireland's objectives. This work is being undertaken within a whole-of-Government framework led by the Department of Foreign Affairs and Trade. While the precise customs arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK, it is clear that political solutions must be found before technical resolutions can be applied. I am informed by the Revenue Commissioners that it is not possible, at this juncture, to assess what specific arrangements would be required if the UK left the customs union or what post-Brexit checks would be carried out. The Chairman of the Revenue Commissioners has previously confirmed that Revenue is not looking for sites for customs posts. |
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