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Have you ever wondered if the grass in your backyard—or even fields behind your house—can affect how much tax you pay? This incredible case shows how a huge piece of land, filled with grass, was ruled to be part of a residential property, not mixed-use, and how that decision affects Stamp Duty Land Tax (SDLT)
On 18 February 2022, the appellant bought a residential property in Hertfordshire that spanned about 106 acres. Out of this, a 40-acre area at the back of the house was made up of fields with clear boundaries. When the property was purchased, these fields came with a “mowing licence.” This licence, granted by the previous owner on 1 September 2021 for one year (expiring on 31 August 2022), was part of a number of yearly mowing licences that had been issued since 1 September 2016. The licence allowed a company to cut the grass one or two times a year and remove the hay or haylage.
HM Revenue and Customs (HMRC) wanted to charge SDLT on the basis that the main subject matter of the transaction was entirely residential property. In other words, HMRC said that the fields were just part of the house’s grounds, meaning the whole deal was for a home. However, the appellant argued that the property was mixed-use because the fields were used for agricultural purposes. This set up a big question: Were the fields considered part of the garden and grounds of the house, or were they a separate, mixed-use element?
The First-tier Tribunal (FTT) had to decide. They looked at what was happening in the fields. The evidence shows that the fields have been continuously used for growing and cutting grass since 2016. No animals were grazed there—only grass was managed. The company involved would come in once or twice a year to cut the grass, collect hay, and even prepare the land each spring by applying fertiliser and herbicide to boost the grass crop. Despite the regular mowing, the fields were very close to the house, making it hard to see them as separate from the residential property.
Because of this close connection, the FTT ruled that the fields were indeed part of the house’s grounds. This meant that the whole property, including those 40 acres of fields, was classified as entirely residential. The appellant’s argument that the property was mixed-use was dismissed. As a result, HMRC’s decision to charge SDLT based on the property being solely residential stood.
This case, Lazaridis v Revenue and Customs [2024] UKFTT 925 (TC), sends a powerful message. It shows that even if a large piece of land is used for activities like mowing grass if it is close enough to the home and managed as part of the property’s grounds, it can be treated as residential. This decision might seem surprising, but it is a clear example of how the rules work.
If you ever buy a property with extra land, remember that the way that land is used—and its relationship to the home—can affect your tax bill. This case teaches us to look closely at every detail because even something as simple as a mowing licence can change the entire picture. Stay curious and informed—tax rules can be full of surprising twists!