A word from an expert on… Buying a country estate with tenants
Know what you’re getting into—and how you can save money—says Boodle Hatfield’s Edward Allen
The first thing to do is to establish the basis on which tenants occupy cottages on an estate. Residential tenants can have significant rights and it may not be possible to obtain vacant possession merely by terminating the relevant tenancy agreement. In some cases, there is no written tenancy agreement in place at all, adding further complication. Agricultural workers may even enjoy both the right to remain in occupation and an accompanying right of succession for their families.
Second, when purchasing an estate with more than one residence on it, there are some commonly missed Stamp Duty (SDLT) benefits. For example, six or more dwellings on an estate all purchased at the same time may attract non-residential
rates of SDLT capping at 5%, rather than residential rates with a 15% top rate. Separately, Multiple Dwellings Relief is available whenever more than one dwelling is sold and should also be considered.
If the dwellings are let, then the buyer will need to take advice to ensure all the appropriate deductions are made when computing the rental income on which tax will be payable. Such deductions include the costs of advertising, any managing agents’ fees and relevant mortgage-interest costs. Edward Allen is a solicitor in the property team at Boodle Hatfield. Visit www.boodlehatfield.com or telephone 020–7079 8119