Getting your ducks in a row – Before you apply for planning permission
An agricultural building might be worth £50,000, but with planning permission to convert it to a four-bedroom house it could be worth anywhere from £200,000 to £800,000 depending on its location. The same figures are likely to apply to a strip of garden.
If you have a piece of land that is suitable for lots of house you could be adding millions of pounds in value.
It is, therefore, really important that before you apply for planning permission and add value you consider what you want to do with the capital that is produced.
A case that we saw recently involved a farmer that got planning permission to build two houses in a field next to the farmyard, he then gifted the plots to his two sons so that each could build a house. Despite him gifting the property there is a potential stamp duty land tax charge and a capital gains tax charge that could amount to over £120,000. If the farmer had gifted the land before applying for planning permission the tax charge would have been nothing.
If you are considering adding value to property it is important to speak to a professional before you submit the application. Prior planning is generally far more effective and almost always cheaper than trying to save charges after the value has been added.
If you have a planning project that you would like to discuss please do contact us for a free no obligation initial discussion .