Farm Business Council Report November 2024

IFA Submission on Finance Bill 2024

Executive Summary

• Support provided to the Tillage, Suckler and Sheep sectors are acknowledged. 

Additional funding should supplement the payments of current measures within individual schemes, rather than seeking increased scheme requirements/actions to receive payment. 

• Reduction in overall funding to Forestry and Horticulture sectors should be reversed. 
• Increase in Flat Rate VAT addition to 5.1% is acknowledged but still lower that the 5.5% rate in 2022 and it must continue to be available to all non-registered farmers. 
• Changes to qualifying condition for Agricultural Relief proposed by IFA and further time sought to ensure no unintended consequences to genuine farmers. 
• Amendment to Residential Zoned Land Tax noted but places more burden on farmers to apply for change of zoning and is only in place for the year 2025. No provision made for lands falling into scope for RZLT post 2025. All actively farmed land must be exempt from RZLT.

Qualification Criteria for Agricultural Relief 

Budget 2025 proposed the addition of a 6-year active farmer test on the disponer of lands immediately before transfer. This proposed new test could have unintended consequences of some farmers not being eligible for Agricultural Relief on inheritance of agricultural lands from disponers who are genuine farmers, but failed to meet this proposed new 6-year active farmer test. IFA have engaged with the Department of Finance since The Budget was announce on 1st October and highlighted the unintended consequences that these changes in requirement to qualify for Agricultural Relief would cause many genuine farmers. IFA’s position is that Agricultural Relief must be retained, as it a vital tax relief that allows for the transfer of farms from one generation to the next. 

Following this engagement by IFA, Taoiseach Simon Harris made the announcement that the changes to Agricultural Relief announced in the Budget would be postponed, while speaking at an IFA conference “Farming and Food, a Sector Worth Backing” in Co Kildare on Thursday 31st October.  Any change to the relief would only be implemented following engagement with stakeholders including IFA. 

Residential Zoned Land Tax Deferred (RZLT)

RZLT was initially deferred in the run up to Budget 2025, but reinstated following disagreement at Government Cabinet. The announcement in Budget 2025 by Minister for Finance Jack Chambers, that farmland will be exempt for 2025 following an application to rezone based on economic activity, is far from ideal. The IFA campaign to permanently remove active farmland from residential zoned land tax is a priority ask in the IFA Election Manifesto.

IFA Election Manifesto

Following the announcement of Budget 2025 in October and the subsequent publication of the Finance Bill2024, the IFA farm business committee have included the sector funding requests in the IFA Pre–General Election Manifesto. Supports for all the vulnerable sectors, given the dramatic reduction in income in 2023 as reported by the Teagasc National Farm Survey, are needed and these supports must be included in the program for government following the upcoming general election. The Teagasc National Farm Survey for 2023 shows that the average family farm income in Ireland is now below €20,000, the lowest level in over a decade.

Engagement with Financial institutions. 

Following their successful running of 4 regional farm finance meetings in September organized by the IFA farm business committee, continued engagement has helped farmers on many finance requests. All the mainstream banks and credit unions have committed to improve turnaround times on loan application and the common request from farmers for face-to-face engagement at the regional meetings has been acted on by both Bank of Ireland and AIB. Both have agreed that on request these in-person meetings will be arranged at local branches. 

Revenue Commissioner meeting

IFA Chair Bill O’Keefe to meet with Revenue Commissioner on Vat 58 rebate issues including increasing the eligible list for Vat rebate.