The agricultural sector in Northern Ireland is witnessing a significant surge in land values, with the average price per acre now exceeding £20,000 for the first time. This upward trend, highlighted by recent reports in BBC News and the Belfast Telegraph, presents both opportunities and challenges for farmers and landowners alike.
At McCay Legal, we understand the complexities that come with navigating these changes. Whether you are considering buying, selling, or planning your estate, our expert team is here to provide tailored guidance. Contact us at 02871 371705 for a consultation.
Opportunities for Farmers and Landowners
Selling Opportunities: For farmers contemplating the sale of their land, now could be the perfect time to capitalize on record-high market prices. With demand remaining strong, sellers have a unique window to secure favourable deals.
Purchasing Decisions: On the other hand, prospective buyers should approach acquisitions with caution. While land remains a valuable investment, purchasing at elevated prices requires careful financial planning to ensure long-term viability and profitability.
Re-financing – With such high values in place, now may be the time to seek finance for the purposes of a restructure, expansion or the diversification of your farm business model. Having to place security on less lands to get that required and necessary injection of funds to future plan.
Inheritance Tax Implications
One of the most pressing concerns arising from the increase in land values is the potential impact on inheritance tax (IHT). The UK government’s recent budget changes propose capping Agricultural Property Relief (APR) and Business Property Relief (BPR) at £1 million starting April 6, 2026. Assets exceeding this threshold will be subject to a 20% tax on the excess value.
Given that farmland values, combined with residential properties, farm buildings, machinery, and livestock, often surpass the £1 million threshold, many farmers are understandably worried about the financial implications.
Diversification has been a big move within a lot of farms over recent years as many have established farming related businesses to help fund the ever increasing costs of such a demanding market. Its is important that not only good financial tax advice is secured, but also that commercial business areas and residential properties which are now in repurposed agricultural farmlands are properly sectioned off and classified correctly so they can avail of any exemptions, reliefs and protections which may be available.
What This Means for Northern Ireland Farmers
Analyses suggest that around half of Northern Ireland’s farms, which account for 80% of farmed land, may be affected by these changes. As land prices continue to rise, even modest-sized farms risk breaching the inheritance tax threshold based on acreage alone.
Strategic Planning is Essential
To safeguard the future of your farm and minimize tax liabilities, it is crucial to engage in comprehensive succession and estate planning. At McCay Legal, we can assist you in, Implementing Succession Plans: Establishing clear and effective plans to ensure the seamless transition of your farm to the next generation.
Contact McCay Legal for Expert Advice
Navigating the complexities of rising land values and evolving tax regulations can be daunting. Our experienced legal team is here to help you make informed decisions and protect your assets for generations to come.
Call us today at 02871 371705 to schedule a consultation and find out how we can support you during this pivotal time.
Written By Sinead Creighan – Director Of Commercial Property, Real Estate and Private Client