Agricultural land purchase

S

stonewall

Guest
Hi
I am looking for advice on purchasing some poor quality farm land +peat bog that is next to my house. The land is pretty rural and non residential so has little development potential and will cost about €130k. It has very little potential to provide income and has no subsidy entitlements. I currently rent land in another area for 2 ponies.

I have around €2Ok myself

Is it possible to get a mortgage purely based on the land itself which would not be connected to the mortgage on my house.

I could afford to pay €1000 per month in repayments & interest.

any advice appreciated

Thanks
 
I don't see why not? Although, they might be reluctant to give a mortgage on land which would be very difficult to repossess and sell.

But the lender would have to look at your total repayment capacity on both mortgages.

Do you have any equity in your home? If so, it would seem better to remortgage your home to buy the land. The rate would probably be lower and the charges might be lower. You might have to pay exrtra mortgage protection insurance which you would not have to pay if you were just buying the land on its own. If it's part of your home, you might pay lower stamp duty. I have an idea that the stamp duty is 9% on all non residential property irrespective of value of the transaction, but others would be better placed to advise you definitively on this.

Check out the tax situation. If the land becomes part of your home and principal private residence, any gain might be exempt from CGT.
 
You can build houses anywhere now even in a bog, a boggy farm 12 acres sold near a village in cork recently for €9m. Also this land is usefull for growing trees there is a good grant €200/acre/year for the life of the plantation.
 
Stamp duty on 130K is 8%. Have you thought through whether this is a good investment?
 
As far as I know, you can get something called a land loan from a couple of lenders.

I think the maximum Loan to Value is 75%
 
Thanks everyone
Yes ponies are a bit expensive but i would be looking at a long term investment and hoping that perhaps it would be something for my Kids in the future.
There is around 20 acres but 10 acres of it would only be suitable for turf cutting.
On the issue of Stamp duty if you are under 35, by completing a certain Teagasc course you can avoid or re-claim the Stamp duty.
 
Yes it's called young trained farmer relief, but the course is not for the faint hearted- if you have a primary degree I think you can do a five or six week course but that is full time so you would need your work to be fairly flexible to accomodate that.
 
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