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Agricultural Relief

  1. Overview
  2. What is agricultural property?
  3. What are the conditions for Agricultural Relief?
  4. How do you calculate the relief amount?
  5. Can Agricultural Relief be withdrawn or clawed back?
  6. How do you claim Agricultural Relief?

What are the conditions for Agricultural Relief?

To qualify for Agricultural Relief as a farmer, the value of your agricultural property must consist of at least 80% of your total property value on the valuation date. This is called the ‘Farmer Test’. This does not apply where agricultural property consists only of trees and underwood. 

For gifts and inheritances taken after 1 January 2015, where the valuation date is also on or after 1 January 2015 you must:

  • farm the agricultural property on a commercial basis for at least six years from that date
  • or
  • lease the property to someone who farms the agricultural property on a commercial basis for at least six years from that date.

The above requirements are known as the 'Active Farmer Test'.

Additionally, the person receiving the gift or inheritance, or the person leasing the property must either:

  • have an agricultural qualification (as listed in Schedule 2, 2A or 2B of the Stamp Duties Consolidation Act 1999)
  • or
  • farm the agricultural property for at least 50% of his or her normal working hours.
  • Example

    Mary owns a house (valued at €80,000) with a mortgage (€20,000), a car (€5,000), and a bank deposit account (€2,000). Her house is not a farmhouse. She receives a gift of farmland (€300,000), plus livestock and farm machinery (€50,000). Is Mary a 'farmer' for the purpose of Agricultural Relief?

    Example of Agricultural Relief
    AssetAgricultural PropertyAll Property
    House   €60,000
    Car   €5,000
    Bank Deposit   €2,000
    Farmland €300,000 €300,000
    Livestock & Machinery €50,000 €50,000
    Total €350,000 €417,000

    The gross market value of Mary's assets after receiving the gift is €417,000; the gross market value of her agricultural assets is €350,000. (€350,000/€417,000) x 100 = 83.9%.

    Therefore Mary is a 'farmer' for the purposes of the Relief.

Next: How do you calculate the relief amount?

Published: 20 June 2023 Print this page

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