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).

Criteria

  • 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.

Readers' comments (9)

  • i was looking at this property that said aoc but i havent worked in agrculture before so would i be allowed to grow stuff on the land of 29 acres or not

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  • Hi My husband would like to breed heavy horses in his retirement, we are currently looking for land on which to do this. We do not work in agriculture at the moment, can we buy a property with a agricultural occupancy condition ? Thanks.

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  • We are looking to buy a house with a agricultural occupancy clause on it, it is 56 acres do we have to make money from the land ? or can we just live off the land?

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  • We would like to buy a property with AOC, currently we do not work in the agri. industry, but, we do intend to farm (it will be my sole job) the land (husband will keep his current job). Are we allowed to buy the property?

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  • i have been looking to buy a property with a AOC on it. the land is only 0.5 of an acre and i will take retirement from my current job and use the land but will hardly make any money from such a small amount of land. would i be able to buy and live in such a property? i would like to keep a few chickens etc on the land and sell the eggs. and have a small cattery.

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  • Please can I see the answers to the above questions as mine is a mixture of some of them . I want to start a horse sanctuary on the property which has 20 acres and an agricultural tie. My daughter will be co-in charge and my husband continue with his job which will earn more than the horse sanctuary. Thanks for advice .
    Kate x

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  • Trying to buy a proerty with an AG tie it has been on the market for about 3 years with only my offer on it.
    The planning dep are being totally blocking in every comment I make about relaxing the tie. The owners are going to appeal 11/03/2014 as the application for removal was turned down last year. I feel we have a point as the property has been on the open marklet for such a long time it can be proved the property is no usefull as an agri property.

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  • Our local authority insist that a Change of Use to (to C1 Guest House) effectively removed the ag tie on a house we are buying, although this tie still comes up on the searches. Does anyone know if this is lawful? Surely lots of people would be making guesthouse applications if this were a viable alternative to the usual 12 month marketing exercise required before a tie will be lifted? Thanks for any thoughts!

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  • I am 56yrs old and have been employed as in agriculture my whole working life. I am now employed at an agricultural college as an agricultural engineer lecturer and want to know if I would qualify to buy a house with an agricultural tie?

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