Recently in Land Category

Publication of the draft Finance Bill following the Budget has clarified the position on the charging of Stamp Duty Land Tax on farmhouses.

Where a farmhouse is bought as part of a farm it will be classed for SDLT purposes as a mixed asset, attracting SDLT at 4% on purchases worth more than £500,000.

Only where a farmhouse is bought separately from the main land will it risk being classified as residential property, bringing a liability to SDLT at 5% for those valued at £1m-plus, or 7% for those worth more than £2m.

However, these rates apply only where the buyer is an individual or a normal farming partnership (ie one with no corporate partner). Where a corporate partner is involved or where the buyer is a company, an SDLT rate of 15% can apply on houses worth more than £2m.

Strong demand for farmland from investors and farmers pushed prices higher in the first quarter of 2012 and the outlook remains firm.

English farmland prices increased by 0.4% in the first three months of the year to an average of £15,006/ha (£6,073/acre), Knight Frank research showed. That followed a fall in prices in the second half of last year and was just below the record of £15,211/ha (£6156/acre) reached last summer.

A separate report by Chesterton Humberts forecast values would continue to increase by an average of 6% per year over the next five years.

“Improved commodity prices and rental returns, with the strong rents generated by FBTs combined with the tax advantages and security of landownership, are important factors which are continuing to make land more attractive to non-farming investors in the current economic climate,” the firm’s David Hebditch said.

The number of agricultural holdings across Europe fell by one fifth between 2003 and 2010, as the average size continued to increase, European Commission figures have revealed.

In 2010 there were just over 12m agricultural holdings in the EU-27, and a farmed area of 170m ha. While the number of holdings was down 20% on 2003, the area was just 2% lower, meaning the average size increased from 12ha to 14ha.

Seven states accounted for almost three-quarters of the utilised agricultural area, with the largest area in France. The largest average holding size was in the Czech Republic (152ha), followed by the UK (79ha), Denmark (65ha), Luxembourg (59ha), Germany (56ha) and France (53ha).

Seven member states accounted for more than 80% of all holdings. These were Romania, Italy, Poland, Spain, Greece, Hungary and France. The biggest drop in the number of holdings was in Estonia, Bulgaria, Latvia and Poland, while Malta and Sweden were the only countries to record an increase.

Their farmers have an average age of 57 but an increasing number is older than 75. Their farmland prices have risen by between 20% and 70% in the last five years with the most significant growth in regions with intensive field crops and/or livestock production.

A Rabobank report on the US land market concludes that recent land price rises are driven mainly by increased commodity prices, low interest rates and a limited supply of land for sale, but that the increases are not due to a speculative bubble.

The report expects US land prices to rise for at least another couple of years. Among risks for their future path it identifies the trend to absentee farmers, as land owned by ageing farmers changes hands to non-farming heirs. Interest rates, global commodity supply and demand, water availability, new environmental restrictions, reduced farm margins, biofuels policy and inflation are further important influences

If arable land at £10,000 an acre in the UK is too steep for you, how about an estate the size of Kent for US$10/acre? Savills is about to launch the sale of Estancia Punta del Agua in north west Argentina with a guide price expected to be in the region of US$10m.

At around 400,318ha (989,186 acres) and sitting on a national route connecting major ports on the Pacific and Atlantic coasts, soils on the Estancia range from naturally fertile silt in the north and centre to more sandy soils in the south.

The area is soon to benefit from significant power supply improvements, is crossed by three main rivers and sits on one of the largest aquifers in Argentina, providing huge irrigation potential, says Stephen Hall of the firm’s Lincoln office.