Leasing farm land
You may claim Income Tax (IT) relief on certain income that you earn from the long-term leasing of your farm land. Your farm land must be in Ireland and the tax relief cannot operate to create a loss. You cannot lease your land to a close relative.
You should use the Revenue Online Service (ROS) to declare this income on your annual tax return Form 11.
For your lease to qualify, it must be:
- in writing or evidenced in writing
- for a definite term of five years or more
- for the purpose of working the land with the aim of taking produce from the land. For example, normal farming, market gardening, horse breeding, cattle dealing or fruit growing.
If you lease land to another person you are known as a lessor. Only lessors who are individuals can qualify for the relief.
A lessee is the person who leases the land from you. From 1 January 2015 a qualifying lessee can include a company.
The lessee cannot be connected to the lessor. If the lessee is a company, it cannot be under the control of you or any person connected to you.
The lessee must use the leased land for the purpose of carrying on a farming trade
How the relief is given
The profit from the letting of the farm land is assessed by Revenue as rental income. This relief is given as a reduction (up to a maximum limit) of your total taxable rental income. Your tax relief is subject to a maximum reduction as outlined below.
You will only qualify for one reduction regardless of the number of qualifying leases you may have.
The maximum reduction allowed each year
Maximum reduction allowed each year
|5 years or more but less than 7 years
|7 years or more but less than 10 years
|10 years or more but less than 15 years
|15 years or more
Different threshold amounts applied for the years 2014 and prior.