Land and buildings (situated in an EEA state) which is:

  1. Acquired on or after the 7th December 2011 and up to and including the 31st December 2013.
  2. Continues in the same ownership for a period of at least seven years from the date the land or buildings were acquired.

There will be no capital gains tax payable on the capital gain in the seven year holding period. The best way to explain this is by an example:

Example 1

John purchases 50 acres of land on the 1st of May 2012 for €500,000. He sells the land on the 1st of May 2019 for €700,ooo. He makes a profit of €200,000 and pays no capital gains tax. The capital gains tax at the moment is 30%, capital gains tax saving is €200,000 at 30%  = €60,000.

Example 2

Lets assume John held the land for 10 years and sold it at the same price €700,000. The capital gain is €200,000 but his relief this time is €200,000 at 30% x7/10 =€42,000. John pays €18,000 capital gains tax.

Land prices are improving slightly at the moment and house prices may not have bottomed out yet, it maybe a good time to invest and availe of this capital gains tax holiday.