Draft Finance Bill clarifies SDLT and farmhouses

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.

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