With recent changes to Class Q and Class R for agricultural buildings located on agricultural units of more than 5 hectares, it is time to think strategically to ensure you are not missing out.

So what does this all mean?

Under Class R, agricultural buildings of a total area of 1,000 square meters (an increase from 500 square meters) as of April 2024, can be converted into General Industrial, Storage or Distribution, Hotels, Commercial Business or Service or Outdoor Recreation uses.

The extension in the overall development area will enable both those who have already made use of the previous 500m2 on offer to convert additional buildings and new applicants to make use of the full extended floor area, so long as both the building and Holding meet the below criteria.

For Class Q – changing agricultural buildings to residential units, a change was announced in May 2024, with a transition period where both the old and new rules can be used until 21^st May 2025, and this is where strategy may come into play.

The ‘old rules’ allow the below development possibilities on buildings constructed before 2013:

• Three ‘large dwellings’ of between 100m2 and 465m2 each,
• Five smaller dwellings of up to 100m2 each – with an overall space limit of 500m2
• A mixture of larger dwellings and 2 smaller dwellings, so long as the overall area for conversion does not exceed the above (smaller dwellings not exceeding 100m2 and larger dwellings not exceeding 465m2). The maximum development space would therefore be 4 small dwellings of up to 400m2 in total, and one larger dwelling of 465m2 leaving a total development area of 865m2 including all first floors and mezzanines.

Under new Rule for Class Q:

A total area of 1,000m2 can be converted into up to 10 dwellings, but the maximum size of each of the dwellings has now been limited to 150m2. This is a reduction in size for large dwellings of 315m2!

Under new rules barns can be extended to the rear by up to 4 meters onto any hard standing which was already in place as of the 24^th July 2023 (no extensions were previously permissible). The building must now have been built before 24^th July 2023, as part of an established agricultural unit, and therefore far more barns will qualify for the new rules than did previously.

So thinking strategically, do you have barns which meet the old Class Q requirements, and would be of the highest value as larger dwellings? If so your application needs to be in by 21^st May 2025, or does the market in your area, and your site better lend itself to 5-10 smaller dwellings? Do you have barns which may now qualify but didn’t previously? In which case the new rules might be better for you.

Once you have decided whether Class R, or either of the Class Q rules might work for you, it is key to understand any tax implications (CGT or IHT), as well as how the asset is owned.  Transferring ownership the property prior to obtain planning consent when it is lower value may be strategic, but would it still be considered part of an established agricultural unit?

For further details on building criteria for Class R or Class Q or any further information on any of the above, get in touch.