Buying house and land (different vendors)

jules1010

Hi,

Wonder if anyone can help me here? We're looking to buy and saw a house we liked, but the garden was a little small. It's on at just under 250k stamp duty limit. However, there is a huge plot of land to the side and back of property. Owner can't get planning permission to build on it and is looking to sell the land which would make a huge garden. It's on with same agent as the house, but different vendor to the house.

So my questions are:

1. Will separate purchases of the land and house count as one purchase for stamp duty purposes or because they are separate vendors, will we be safe?

2. Are there likely to be problems with converting vacant land into garden or is it just a case of taking down the fence? Sorry if that's a stupid question, but I really have no idea about buying land.

3. If we could get both, would having more land mean higher council tax band or is this based on the size of house only?

4. Are there any other issues I need to consider?

Thanks for reading, any help gratefully received. :beer:
Jules

PasturesNew

It's a good question, that no doubt somebody who knows will answer....

As I read it, if you buy a 2nd item (the land) that came to your knowledge because of the 1st item (the house), then they could be tied together for the purposes of having to pay stamp duty.

I know this would apply if you went to view a flat, say, at £150k and found another in the same block for sale, so bought them both ... you'd have to pay stamp duty as it would have been due on the £300k and the two are not separate transactions.

So, my guess is that you probably will have to pay stamp duty on the sum of the purchases.

But I don't actually know/never looked into it, was just always aware that there is an odd "related purchases" clause in stamp duty due.

PasturesNew

Oh - and what sort of land is it? You can't just use land as a garden if it's not garden-land (amenity)... if it were, say, agricultural, etc then you can't turn it into garden without planning permission.

PasturesNew

Right... after a quick google:

Under section 108 FA2003, transactions are linked if they are between the same vendor and purchaser, or in either case, persons connected with them. This means that SDLT will be calculated with reference to the total consideration given on all properties transferred between the same vendor and purchaser, regardless of whether they have separate deeds, or the time elapsed between the transfers.

It says same vendor AND purchaser. As yours are separate vendors, it looks to me like they are not related transactions at all. So stamp duty wouldn't be on the sum of the transactions, but each individual one.

HTH.

jules1010

Thanks PasturesNew for your replies!

AFAIK the land is not agricultural. It's just overgrown land at the moment and the owner uses a small part as an allotment. It's just a strange patch of land that has ended up sandwiched between properties.

Thanks for that info. That's exactly what I was looking for but couldn't find in my googling, and exactly what I wanted to hear!! :j:beer:

Richard_Webster

As I read it, if you buy a 2nd item (the land) that came to your knowledge because of the 1st item (the house), then they could be tied together for the purposes of having to pay stamp duty.

I know this would apply if you went to view a flat, say, at £150k and found another in the same block for sale, so bought them both ... you'd have to pay stamp duty as it would have been due on the £300k and the two are not separate transactions.

I disagree. How you find the land is nothing to do with anything. Unless the sellers are connected to each other AND they won't sell to you one without the other they are separate transactions.

If you buy two flats in the same block from different people they are separate transactions.

If you buy two flats in the same block from the same person they can still be separate transactions if the seller would have been genuinely prepared to sell only one flat or two and wasn't bothered - but if he said you could have two at a reduced price but you had to buy two then they are linked and you have to pay SDLT on the combined price.

Oh - and what sort of land is it? You can't just use land as a garden if it's not garden-land (amenity)... if it were, say, agricultural, etc then you can't turn it into garden without planning permission.

I agree.

jules1010

Thanks Richard, that confirms what PasturesNew found by googling. That's really helpful.

Does anyone know if this will have an effect on council tax please?

Just to update if anyone is interested...I contacted the planning department yesterday for informal advice. They didn't seem to think it would be a problem converting the land into garden, they were more concerned about where on the land a double garage would be built as it's in a conservation area, so there are restrictions.

Doozergirl

jules1010 wrote: »

Thanks Richard, that confirms what PasturesNew found by googling. That's really helpful.

Does anyone know if this will have an effect on council tax please?

If you keep the titles separate (there's no reason why you can't, it costs no more even when you sell them on to have them separate) and do nothing except convert it to garden then I don't think they would be interested.

Building a garage on that land for the house and alerting Building Control to it might alert the Valuation department though. You're hardly talking about a massive amount each month though.

Has the current vendor carried out improvements as you might be due a revaluation when you move in anyway?

lanerover

Wow are'nt you lucky! You do realise that any land which can be registered as garden then becomes "brownfield" and able to be developed (depending on your location) Get planning permission and increase its value overnight.LoL

planning_officer

lanerover wrote: »

Wow are'nt you lucky! You do realise that any land which can be registered as garden then becomes "brownfield" and able to be developed (depending on your location) Get planning permission and increase its value overnight.LoL

No, that's not true at all - gardens are no longer classified as brownfield land (see the revised 'PPS3: Housing' published in August 2010).

Besides, even if it still was brownfeld land, that doesn't mean it's able to be developed at all. National guidance says that a certain percentage of houses should be built on brownfield land, but this is not at the expense of local character - it's certainly not just a blanket acceptance to build something there. Plus, this land is in a conservation area and the OP says that the current owner has not been able to get planning permission for anything there, so it actully seems like it won't be able to be developed!