The relief can be clawed back if you sell the land within 6 years and don't reinvest. If the property fails the tests, Business Relief may apply instead.
Quick facts
- Relief
- 90% off taxable value
- Asset test
- 80% of your assets agricultural
- Farm or lease
- 6 years, commercially
- Qualification
- Trained farmer, or 50% of working hours
- Covers
- Land, buildings, stock, machinery, entitlements
- Clawback
- Sale within 6 years without reinvesting
What it does
"This relief reduces the taxable value of the property, including land, by 90%." Revenue's example: "Market value €300,000 Less 90% (€270,000) Agricultural value €30,000". Costs you pay are reduced by 90% too before they're deducted.
Agricultural property means "agricultural land, pasture and woodland (situated in the European Union or the United Kingdom) crops, trees and underwood growing on such land farm buildings and certain dwelling houses on the land livestock, bloodstock and farm machinery on the property entitlements to farm payments under EU Regulations".
The asset test
"To satisfy the asset test at least 80% of the total value of your property must consist of agricultural property." It's measured on the valuation date, including the gift itself.
"You cannot deduct any debts from the value of the property for example, a mortgage or other charge on the property." The exception is a loan on your own home, if it isn't a farmhouse.
The active farmer test
You must "farm the agricultural property on a commercial basis for at least six years from the valuation date or lease the property to someone who farms the agricultural property on a commercial basis for at least six years from the valuation date."
And you, or the lessee, must "hold a 'trained farmer qualification' or hold a qualification listed in Schedule 2 or 2A of the Stamp Duties Consolidation Act 1999 or farm the agricultural property for at least 50% of their normal working hours." Teagasc lists the qualifications.
When it's clawed back
If you sell part "within six years of the valuation date of a gift or inheritance and you do not replace it with other agricultural property." You have "within one year of the disposal or within six years of a disposal under a compulsory purchase order." to reinvest. Stopping farming in those 6 years can also withdraw it.
Common questions
How much is Agricultural Relief?
It reduces the taxable value of agricultural property by 90% for gift and inheritance tax.
What is the asset test for Agricultural Relief?
At least 80% of your total assets, by gross market value, must be agricultural property on the valuation date.
Do I have to farm the land myself to get Agricultural Relief?
No. You can lease it for 6 years to someone who farms it commercially and meets the qualification or working-time test.
Can Agricultural Relief be clawed back?
Yes, if you sell within 6 years and don't reinvest in agricultural property, or stop farming it as required.