With increasing pressure on developers to meet environmental requirements, Biodiversity Net Gain (BNG) is considered a significant issue within the agricultural and property sectors.

As developers look for practical and cost-effective ways to satisfy mandatory biodiversity obligations, many are turning to landowners to provide land for off-site biodiversity projects. This is creating new commercial opportunities for rural landowners, but also raising important legal, tax and long-term land use considerations.

Under the Environment Act 2021, most new developments in England are now required to achieve at least a 10% increase in biodiversity. The aim is to ensure that development leaves the natural environment in a measurably better state than before.

Developers can meet BNG requirements on-site, off-site, or through the purchase of statutory biodiversity credits. In practice, many developers are turning to off-site arrangements, as purchasing statutory credits can be extremely costly, potentially reaching six-figure sums.

Opportunities for Landowners

Landowners may be able to generate an additional income stream by allowing land to be used for off-site biodiversity schemes. These arrangements usually involve a developer paying the landowner to manage land in a way that improves biodiversity over a long period of time.

There may also be inheritance tax advantages, as land used for Biodiversity Net Gain purposes can still benefit from Agricultural Property Relief (APR). Business Property Relief (BPR) may also be available, particularly where the landowner remains actively involved in habitat creation and maintenance.

However, landowners should also be aware that VAT may apply and, depending on how the arrangement is structured, there could also be capital gains tax or income tax implications.

Before entering into any arrangement, landowners should carefully consider both the legal and financial consequences.

Long-Term Commitments and Legal Agreements

Although BNG schemes can provide commercial opportunities, they also involve significant long-term obligations.

Land used for biodiversity purposes must generally remain in that use for a minimum period of 30 years. During this time, landowners may be responsible for maintaining and monitoring the land to ensure biodiversity targets are achieved and maintained.

Formal legal agreements are therefore essential. These agreements are likely to deal with matters such as:

  • management obligations;
  • payment arrangements;
  • monitoring and reporting requirements;
  • responsibility for costs and maintenance;
  • dispute resolution procedures; and
  • what happens if biodiversity targets are not met.
  • If the land is subject to a lease, the lease term will usually need to be at least as long as the BNG agreement itself.

Registration and Enforcement

BNG obligations must also be formally secured against the land.

This is usually done either through:

  • a Section 106 agreement with the Local Planning Authority; or
  • a conservation covenant entered into with a responsible body.

These obligations are registered against the property and may affect the future use, value and development potential of the land. It is therefore important for landowners to fully understand the long-term implications before entering into any agreement.

Failure to comply with BNG obligations could result in enforcement action by the Local Planning Authority or responsible body, including enforcement notices and potential financial penalties.

Recent Changes

In December 2025, it was announced that the legislation would be updated to introduce a minimum threshold, meaning BNG requirements will only apply to developments covering an area larger than 0.2 hectares.

How Gepp Solicitors Can Help

Biodiversity Net Gain arrangements can be complex and involve significant long-term legal, commercial and tax considerations for both landowners and developers.

At Gepp Solicitors, our Agricultural and Property teams can assist with:

  • Section 106 agreements and conservation covenants;
  • agricultural tenancy considerations;
  • land registration requirements;
  • succession and tax planning considerations; and
  • dispute resolution.

For advice, please call 01245 228115, email AgriculturalEnq@gepp.co.uk