Your land could be your most valuable asset, but there are various issues involved in realising the value of your land.
News for homeowners has been far from ideal during recent times. Increasing taxes bite into the level of disposable income within households, pension funds are being plundered, and inheritance tax is slowly eroding family wealth. For many, equity release is becoming an increasingly popular way of providing much needed financial support in a variety of circumstances: putting children through university, helping offspring with that much needed deposit to buy their first home and, perhaps most importantly, providing peace of mind and financial certainty during retirement years.
A national housing shortage means house builders and developers are desperate for land to satisfy the demand for new homes, which means land prices have never been higher. The situation is particularly acute in the South East of England, and whatever number is banded about, it never seems to be enough.
Land & Brand New Homes has a wealth of experience relating to land disposal, and here we provide an insight into how the process works, and demonstrate how to put yourself in the strongest position possible when negotiating the sale of your land holding.
Selling land can be a costly and time consuming experience, even though the eventual financial reward can be staggering. Here are a number of preparation points that need to be considered before launching into the process.
Try to gain an understanding of what your land may be worth. You should always consider more than one offer to ensure a fair and realistic price is agreed upon. Using a specialist land agency can aid this process, as the agency will endeavour to achieve the best price by approaching a variety of potential purchasers on your behalf.
The sale of land can be executed on a ‘subject to planning’ basis or on a purely ‘unconditional’ basis, at which time the buyer takes a risk and purchases prior to planning permission being granted. Land values are generally higher when a plot has planning permission, but gaining planning will cost money and take time. Your personal circumstances, as the owner, will dictate which route you take, but you should give careful consideration to both.
Capital gains and losses
Make sure you are totally ‘au fait’ with tax legislation, including capital gains tax and inheritance tax. Consult an accountant if you are unsure. There’s nothing worse than making a handsome profit and then seeing 40% instantly disappear because you didn’t do your homework.
Minimise stress levels
Bear in mind that selling land is a complicated and time consuming process (sometimes extending to years). This can have a stressful effect on you, your family, or your business. It’s vital that you are mentally prepared before jumping in at the deep end. Again, a land agency will provide much needed support and advice, as well as running the project for you to suit your personal circumstances.
Get in touch …
I hope these preparation points are of use if you’re considering the sale of land, now or in the future.
To find out more about Land & Brand New Homes, please contact our Land team on 01903 692952.