The housing crisis that has been building up for years affects people in the whole country, but its effect on agricultural land is astounding as it inflates its value. It is even expected to rise further should the government stick to its word of building more than 300,000 properties every year.
If you own private agricultural land, the estimated worth per hectare is £20,000, but the number could reach as high as £2 million per developable hectare. Of course, that is given that planning permission is gained to build a housing development in your area. With these numbers, you might be thinking, “When and how can I sell my land?” Well, you are not the only one wondering the same thing.
Before you put up a “for sale” sign on your land, make sure that you read this post to know what things you need to consider when selling your land:
The Possibility of a Land Assembly
If the owners of the adjoining lands are considering selling their land, you might want to consider pooling all your assets so you can make what is called a ‘land assembly,’ which can actually make it more profitable for all of you to sell your lands. It is because your land might not be big enough to interest property developers, but if you and other landowners decide that you all want to sell, that could be more interesting for developers.
The Time and Cost of Selling
You might be wondering, “Why would it cost me money when I’m the one selling my land for development?”
Not many know that selling land is not something that happens in a day, a week or even a month. Most of the time, it takes months or even years. Also, the larger the land, the longer it would take to sell it.
Not only that, things like securing planning permission and many other things take up time, and processing them could also cost some money.
The Process Involved in Selling Land
Typically, land-selling involves these three steps:
1. Before securing planning permission, you have to ensure that your land is part of your area council’s local plan. This local plan is a document that reflects the housing strategy in your particular locality. It can take a while to do this.
2. Once you have your land included in the local planning, you can apply for planning permission. You, together with the land promoter, need to come up with the housing development scheme that will then be submitted for public consultation.
3. Should the public consultation get positive results, you get your planning permission, and the land promoter can start to broker the land’s sale.
The Tax Implications of Selling Your Land
The tax implications depend on certain factors, from the type of land you are selling and how you intend to sell the land. There may also be implications regarding inheritance tax and liability on the sales proceeds.
If the land is considered your primary residence for a long time, you may be qualified for a Principal Private Residence Relief, which means you’ll get exempted from paying capital gains tax. If the land is separated from your main residence, it will incur up to 45% income tax in total or CGT at 20%.
For land assemblies sale, the tax implications can vary, too, so it’s better to discuss it with a knowledgeable professional.
Selling land for development is not as easy as it sounds, but as challenging as it may be, it can be very rewarding. Remember that you are not just selling a piece of land, but a vision of what the land can potentially become in the future. Of course, it will help you a lot if you know a reputable property developer that can acquire your land.
If you can’t get the question “should I sell my land for development” out of your head, Magna Property Developments is here to help you. You can partner with our team, and we can help you throughout the planning process until you make that sale in Bournemouth, Dorset or Hampshire. Contact us today for more details!