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.