Expanding your garden by purchasing adjoining agricultural land can be a great way to enjoy more outdoor space, grow your own produce, or even create a smallholding. However, before making such a significant investment, it is essential to understand the legal, financial, and practical considerations involved in buying agricultural land to extend your garden. This article outlines what you should know before proceeding.
Understanding Agricultural Land in England and Wales
Agricultural land is primarily designated for farming purposes, whether for growing crops or rearing livestock. In England and Wales, agricultural land is classified based on its use, quality, and zoning. Before buying land for a garden extension or amenity land, you must first determine whether the land is genuinely classified as "agricultural" or if it is deemed to be amenity land or potentially land now used for environmental purposes.
Most agricultural land is not suitable for immediate development into gardens unless specific permissions are granted.
Planning Permission and Zoning Restrictions
One of the first things you need to consider is the planning permission. Agricultural land typically falls under strict zoning laws, and there are many restrictions on how it can be used. For example:
- Change of Use: If you intend to use agricultural land for purposes outside of farming, such as a domestic garden, you may need to apply for a change of use through your local planning authority.
- Green Belt Land: If the land you're eyeing falls within a Green Belt area, development restrictions are stricter, and you’ll need to demonstrate strong justification for converting the land.
- Conservation Areas: If the land is located within a conservation area, planning rules may also be more restrictive to protect the environment and heritage of the area.
- Conservation Covenants: Conservation covenants are legally binding agreements between landowners and relevant authorities which aim to protect and enhance the natural environment and biodiversity on a specific area of land by ensuring long term protection of these sites. If the land which you are looking to buy is subject to this type of agreement, you will be limited as to the changes you can make on the land.
It is crucial to check whether the land is subject to any of these zoning conditions before you purchase it.
Land Size and Legal Considerations
When considering how much land to buy, be aware that you do not need to purchase a large plot to extend your garden. However, even small parcels of land can require careful consideration from a legal perspective.
- Boundaries and Access: Ensure that the land you want to buy has clear boundaries and legal access. It’s not uncommon for agricultural plots to lack clear demarcations or for there to be disputes over the use of access roads.
- Rights of Way and Easements: You will need to check if the land is subject to any rights of way or other easements (for example service media), which could affect how you use it. For example, a footpath or vehicle access might pass through the land, limiting your ability to fully develop it.
- Covenants restricting use: The seller may want to impose conditions or restrictions on your use of the land in future, such a prohibition on building or only permitting certain types of building, for example a shed or field shelter.
- Overage / Planning Uplift Payments: The seller may have been advised to include development overage covenants as part of the contract for sale. Development overage gives the seller the right to receive additional payments from the buyer and future owners of the land when planning permission for development of the land is obtained during a specified future period. The overage payment is usually a percentage of the increase in value of the land resulting from the development planning permission. It is important to understand the full terms of proposed overage covenants and ensure that a payment is not triggered by the development of the land as garden land or as a smallholding.
Having a solicitor familiar with land transactions and the specifics of agricultural law and overage covenants is advisable.
- Costs and Financing
Buying agricultural land in England and Wales can vary greatly in price depending on location, land quality, and other factors.
- Land Valuation: Agricultural land prices are often based on how productive the land is (for farming) and its proximity to urban areas. It is important to get an accurate valuation to avoid overpaying for land.
- Financing: Securing financing for agricultural land may require a specific type of loan, often more challenging to obtain than residential mortgages. It is also possible that lenders might not approve a loan for land that is intended for garden use, as it is not income-generating land.
Some people may use savings, while others may choose secured or unsecured loans or borrow against the value of their current property.
- Stamp Duty Land Tax / Land Transaction Tax: Depending on the price which you agree to pay for the land, you may be liable for Stamp Duty Land Tax (England) or Land Transaction Tax (Wales) and for reporting the transaction to HMRC or the Welsh Revenue Authority within a specified time period from completion of the purchase.
Environmental Factors
You will need to understand the current and potential physical climate risks associated with the land you wish to buy – for example flooding, land subsidence, effects of storms and periods of extreme heat/drought – and if this may have a future impact on how you are able to use and manage the land and also a potential impact on the value of the land.
Land Management and Maintenance
Once you purchase the additional land, you will need to maintain and manage it, especially if you plan on using it as an extension of your garden. This may involve tasks like:
- Clearing and Preparing the Land: Agricultural land might not be prepared for use as a garden, so you will need to budget for any necessary groundworks.
- Ongoing Maintenance: You may be responsible for erecting a new boundary fence / planting a hedge and then responsible for its ongoing maintenance.
Long-Term Tax Considerations
Before making the purchase, it is important to think about the long-term tax position and take advice. Incorporating additional land into the extent of the garden and grounds of your house might have implications in relation to Capital Gains Tax when the whole property is sold or in relation to Inheritance Tax reliefs when you die.
Conclusion
Buying agricultural land to extend your garden in England or Wales can be a beneficial investment, allowing you to expand your outdoor space, grow more of your own food, or create an area for wildlife to flourish. However, it is essential to consider zoning laws, legal boundaries, financing options, long-term costs and tax implications and take professional advice before you are committed to the purchase.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
