What to do ?

Leg&co

I have recently been left an inheritance. The total value including property will be just less than (or about £100k), I am married and (along with my partner) will be retiring within the next 7/8years and am considering what to do with the property.
The house has been badly neglected for a considerable time and will require substantial updating as at present there is: no current gas supply, no central heating, poor electrics, damp proofing required total re-vamp of the kitchen area, plumbing/bathroom and suspect down stairs flooring. In addition to possible structural external work as well as some window replacements (this is what we know at the moment).
As total novices to property development my partner and I are considering the following:
To sell as it is
To up-date the property in line with neighbouring houses and then selling
To up-date and rent out (as an addition towards our retirement portfolio)
To up-date and rent out as a holiday let (the area has possible holiday potential).

What are the tax implications to selling/holding a property and has anyone any sound advice as to possible do‘s and don’ts with property development in general? I acknowledge that this is a very brief over-view, to a broad subject, but any advice that is available would be greatly appreciated.

Tiger_greeneyes

Tax isn't my forte, so I'll leave that one to someone else Although I think the value falls below the threshold for CGT (Capital Gains Tax)... I'm sure someone will put you right on that if I've got it wrong.

I think the first step should really be finding out facts and figures - then at least you'd have more information to help you make your decision.

Ie, what is the house worth as it stands, and what would it be worth when it's in refurbished condition? You could get a couple of estate agents along to view it and give you their thoughts on resale value and letting.

I'd also get the trades in to quote on the refurbishment works.

Check with the local authority about available grants, too. If you're putting in a central heating system, for instance, you might get a concession.

This is a good link for finding information on help with costs - https://www.energysavingtrust.org.uk

You'd probably need to decide whether you'd want the responsibility of a holiday let. If you like the idea of popping in once a week for a clean up (or don't mind paying someone else to do it), then it's worth checking prices on websites like Blakes or Hoseasons who do holiday lets.

The rule of thumb is that there's usually much more money in a property once it's been refurbished. It's why developers fall over themselves to buy them!

silvercar

CGT liability would be the difference between the selling price and its value when you inherited less selling costs less updating costs but not general maintenance. You have an allowance of £9,200 per person so it may be worth putting it into joint names.

Depending how the figures work out it may be better to sell it as somewhere that needs refurb rather than refurb and sell for more.

If you do rent it out you would be subject to income tax on the rental (less a mortgage if you decided to mortgage it to release capital).

Generali

I have heard annecdotally that houses in need of doing up often go for more than the price of the house + refurbishment costs. I'd put a pretty toppy price on it and sell expecting a lower offer. See what happens.

Leg&co

Thanks guys for all the suggestions, will take on board your advice

clutton_2

Because you are so near your pension time your selves, i cannot see

"To up-date and rent out (as an addition towards our retirement portfolio)"

that you will make any money at all to add to your pension if you refurish this property and rent it out for those few years. The works you have outlined will cost a significant amount of money - i would hazard an approximation at £20k - and you will need a large number of years of rental income to recoup that expense.

if i were in your shoes, i would sell it as is, probably at auction, and invest the money in a high interest account. "refurbers" often go for top prices at auction. Which part of the country is the property in ?

So many folks are now into property development that it has become very tricky in terms of profit for professionals - let alone someone who has never done it before.