Stamp Duty Land Tax on rural properties

There is a reported upsurge in the number of buyers looking to buy a property in rural locations now that restrictions on the property market have been eased post Covid-19. For those buying property with additional land there may be some confusion regarding the amount of Stamp Duty Land Tax (SDLT) that is due to be paid.

In the recent case of Myles-Till V Revenue & Customs Commissioners the homebuyer bought a residential cottage with a garden and an adjoining paddock measuring 1.1 acres.  At the time of the purchase the paddock was separated from the garden with a hedge and fence but it was not being used for grazing at the time of the purchase. It had previously been owned and used for grazing by a local farmer until it was sold to form part of the property.

The question which the tribunal considered was if the paddock was used for agriculture which was evidenced by the estate agent’s particulars and a statement from a rural planning consultant describing it as agricultural.

The paddock was not in commercial use at the time of the purchase and the paddock’s size was comparable with the grounds of other similar residential properties in the local area. The tribunal therefore concluded that the paddock should have been treated as part of the grounds of the dwelling which meant the homeowner had to pay additional SDLT of £20,875 plus interest.

Understanding what you are buying and the rate at which you will have to pay SDLT is crucial as there is clearly a very big difference between the various bands.

Here at Gullands we can put you in touch with SDLT experts for advice in relation to purchasing your new property.