If you earn income from leasing your farm land you may be able to get tax relief if you lease your farm long-term. The farm must be in Ireland and the relief can’t operate to create a loss. To qualify, you can’t lease your land to a close relative.
You should 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 5 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 then you're the 'lessor'. Only lessors who are individuals can qualify for the relief.
You will qualify as a lessor if you have not, after 30 January 1985 (the budget date on which the relief was announced), leased the land from a connected person on favourable terms.
A 'lessee' is the person who leases the land from you. From 1 January 2015, a qualifying lessee can include a company. The lessee can't be connected to the lessor and must use the leased land for the purpose of carrying on a farming trade on a commercial basis and with a view to making a profit.
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 also subject to a maximum reduction as outlined below. You'll only qualify for one reduction regardless of the number of qualifying leases you may have.
| Lease term | Amount |
| 5 years or more but less than 7 years | €18,000 |
| 7 years or more but less than 10 years | €22,500 |
| 10 years or more but less than 15 years | €30,000 |
| 15 years or more | €40,000 |
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