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Residential Management Team
The announcement by Nick Boles (Planning Minister) on the 6th March 2014 confirming that the Government is going to make it easier to convert redundant agricultural buildings into residential dwellings is welcome news for farmers/landowners and the rural economy in general and will hopefully go some way to addressing the shortfall of rural housing.
The Ministerial Statement follows a public consultation – Greater Flexibility for Change of Use – launched in August 2013 which proposed that planning permission would no longer be required to convert redundant farm buildings of up to 450 sqm (4,843 sqft) into residential dwellings. Originally the proposed new Permitted Development Rights would have been restricted to 3 dwellings up to 150 sqm (1,614 sqft). Whilst the intricacies of the legislation are still awaited the statement suggests that the 150 sqm threshold has been removed and single dwellings up to the 450 sqm limit will be allowed.
The key tests for the change of use of agricultural buildings to residential use are understood to include:-
If landowners do exercise Permitted Development Rights for change of use to dwellings it will result in Permitted Development Rights being withdrawn to construct new agricultural buildings for 10 years. Consideration should therefore be given to timing and the erection of new farm buildings under Part 6 of the Town & Country Planning General Permitted Development Order 1995 prior to pursuing the use of PD rights for change of use to dwellings on the holding. Furthermore if Permitted Development Rights were used to construct new agricultural buildings after the 6th August 2013 no Permitted Development Rights will be available for change of use to dwellings.
Sadly for farmers and landowners in areas falling within Article 1 (5) designations under the Town & Country Planning Act such as National Parks, Areas of Outstanding Natural Beauty, The Broads, Conservation Areas and land within World Heritage Sites the new Permitted Development Rights will not apply. Given that it is often in National Parks where there is the most acute need for housing from farm/rural workers it is disappointing that there does not appear to be an exception for such key workers at this juncture. That said Local Planning Authorities will be encouraged to consider change of use of redundant farm buildings to dwellings favourably subject to the proposals being sustainable and not having any adverse or detrimental environmental impact.
The proposed changes to the planning regime are likely to have Inheritance Tax implications as HMRC/Capital Taxes Office will no doubt be considering the development potential/value of such buildings as they will not potentially qualify for Agricultural Property Relief. Furthermore if the buildings are deemed to be redundant and not used by the farm business it may also compromise Inheritance Tax Business Property Relief and Capital Gains Tax Roll-over Relief.
The Government’s proposals will also allow the conversion of farm buildings into state funded schools and registered nurseries of up to 500 sqm.
Whilst more details are awaited the Ministerial Statement is positive news and will hopefully help to stimulate the rural economy.
For further information please contact Ashley Dodgson on tel: 01677 422400/ 07789 941933