Agricultural occupancy conditions – understand the implications involved
BOTH central and local government policy oppose the building of new houses in open countryside.
The exception to this is where there is a genuine and proven need for a dwelling to enable the proper functioning of an agricultural, forestry or equine enterprise.
In such circumstances, local planning authorities will restrict the occupancy by imposing an Agricultural Occupancy Condition (AOC) - an agricultural ‘tie or tag’.
This, said Ashley Dodsgon of GSC Grays Chartered Surveyors, would be either as a specific condition of the planning consent or as a Section 106/Unilateral Planning Agreement.
Either way, AOCs restrict the occupancy of a dwelling to a person ‘solely or mainly working or last working in the locality in agriculture’.
However, he said the precise definition and wording of the conditions could vary - widows or resident dependents could potentially qualify in some instances.
The definition of agriculture is reasonably wide ranging but the definition does not include agricultural contractors.
Generally, planning authorities will only permit new dwellings in the countryside where they support existing agricultural activities on established agricultural units (see box for criteria to be satisfied).
- There is an established need
- The need relates to a full-time worker primarily employed in agriculture (275 standard man days)
- The unit and agricultural activity have been established for at least three years and profitable for at least one
- The functional need could not be fulfilled by another existing dwelling
- Other planning considerations are satisfied
A functional test is applied to establish whether the dwelling is required for the essential proper functioning of the enterprise as well as a financial test - that the farming is economically viable and can support the size of dwelling proposed.
In some instances the authorities may remove General Permitted Development Order Rights, attach an AOC to an existing dwelling on the holding, or include a condition to keep land within the same ownership of the property.
Removing an AOC
While it is difficult to remove an AOC, it is possible in certain circumstances to apply for a Certificate of Lawful Existing Use and Development. But, a continuous breach of condition for at least 10 years must be demonstrated and the onus of proof is on the applicant.
An alternative and arguably less contentious approach is to demonstrate the property is surplus to agricultural needs.
This can be by openly marketing the property for typically six to twelve months with a guide price reflecting the occupancy condition. If no reasonable offers are forthcoming, it may be possible to demonstrate there is no demand for it in the vicinity and have the condition lifted.
The implications of an AOC restrict the number of prospective purchasers and market values can be 30 to 50 per cent less than an unencumbered property.
However, while a significant uplift in capital value can be an incentive to seek a release of occupancy conditions, consider the tax implications - inheritance tax and capital gains tax - as Agricultural Property Relief and Roll-over Relief may be jeopardised.