FAQ's
Do I have to pay tax on the sale of a garden plot?
Q - I am selling part of my garden so a detached bungalow can be built. I have been offered £100,000. What tax would apply to the sale?
A – Peter Smith, Independaant Financial Advisor replies, “You may not have to pay tax on the sale but this will depend on the size of the land.
“The capital gains tax exemption for a main residence includes grounds not exceeding half a hectare (approx. 1.25 acres) or a larger area which is appropriate to the size and character of the house.
“If you sell some of the land for development, the sale may be covered by the exemption if the land was used as part of the garden and grounds and is sold either before the sale of the house or at the same time.
“If your garden and grounds exceed half a hectare you are unlikely to be entitled to relief for all of it. The area for which you are entitled to relief is called the permitted area, which is that part required for the reasonable enjoyment of your dwelling as a home. The size and character of your dwelling house is taken into account”.
Other Useful Information
Building Plot -
Put simply, a building plot is a piece of land that has planning permission to build a house on it (see the warning below about buying plots without planning permission). Finding a suitable plot is usually the most frustrating part of the building process. Plots can be hard to find and currently demand far outstrips supply.
Estate and land Agents -
Though they don't actually sell many plots, they are still approached by people looking to sell a potential plot. Be wary as they may have relationships with local builders and will try to make a margin on your deal. You are much better off contacting us as we have no fees or commission and the price, we offer is the price you get. No fuss, No risk…. Simple.
Large areas of land or Estate owners -
Many parts of the UK have large estates that may contain a number of buildings in addition to the main residence. There may be planning possibilities where ruins exist. Opportunities can occur after the death of the main landowner when Inheritance Tax is due. It's possible that these hold potential for development, introduce us and you could earn a finders fee or even help in brokering a deal
Building plot databases -
There are a number of commercial databases. As a rule they contain a fair number of undesirable/difficult to sell plots with restrictions or covenants, If you are looking for a quick hassle free sale of your plot call us first for a no obligation discussion and site appraisal
Local Authorities -
On occasion local authorities will sell off land with development potential. This may include land with commercial building that can either be converted or demolished and replaced. If you hear of such opportunities please get in touch and let us know. We will work with the local town or village to ensure any future development is sympathetic of the local community and surrounding area..
Development Plots –
In short, a development plot is a piece of land with planning permission for a bit more than a single dwelling the land offers more potential but is also a more complicated process. Platinum Build & Developments Ltd have the skills and contacts to broker such deals and help move them forward providing good quality affordable new homes.
Warning:
There are a number of businesses currently offering unachievable prices for plots of land. Their promotional material gives the general impression that, owing to the shortage of building land, these plots have a good chance of obtaining planning permission. If they are unsuccessful, they will then reduce the price dramatically and you may not realise your sites full potential. If we agree to purchase subject to contract and we are successful in obtaining planning permission, the price we agreed is the price we pay.
Mortgage
Help To Buy
Secure your new home
with just a 5% deposit!
We have new properties available to purchase as part of the government Equity Loan ‘Help to Buy’ scheme and you only need to fund 5% of the purchase price.
This is an ideal time to get on the property ladder or to move to a house that offers you more flexible living as your family expands and your requirements change. The ‘Help to Buy’ offers you an affordable solution to purchasing a brand new home in a highly desirable area.
At present this scheme is only applicable in England. The Scottish Government, Welsh Government and Northern Ireland Housing Executive each run a similar scheme, which is worth investigating if you are aiming to purchase a newly built property with a price tag of up to £600,000.
‘Help to Buy’ makes new build homes available to all home buyers (not just first time buyers) who wish to buy a new home, but may be constrained in doing so – for example as a result of deposit requirements – but who could otherwise be expected to sustain a mortgage.
Under the terms and conditions you will not be permitted to sublet your home, enter a part exchange deal on your former house and you cannot own any further property at the time of purchase using the Equity Loan ‘Here to Help You’ scheme.
How it works
The Government lend you 20% of the cost of your newly built home, therefore you would only need to raise a 5% cash deposit with a 75% mortgage to make up the total purchase sum and for the first 5 years there will be no ‘loan fee’ charged on the 20%.
The total amount repayable by you will be the proportion of the market value of your home that was funded by this loan, plus interest and charges. The amount you will have to repay under the loan agreement will depend on the market value of your home when you repay the ‘Help to Buy’ equity loan and the rate of inflation in the meantime.
The equity loan must be repaid after 25 years or earlier if you sell your home. You must repay the same percentage of the proceeds of the sale to the Agency as the initial equity loan.
The equity loan must be repaid after 25 years, or earlier if you sell your home. You must repay the same percentage of the proceeds of the sale to the Agency as the initial equity loan.
Clear and concise government issued information is available at www.helptobuy.org.uk