Advice

noddynoo

I have just bought a 2 bed upper maisonette needing a bit of refurb. When we viewed it had an unofficial roof terrace on top of our bathroom which was ramshackle and dangerous. it is a row of 8 houses in a terrace and 6 have roof gardens and one doesn't None have planning permission. I have replaced the deck with a new one and put railings up and didn't realise I needed planning as it was already there but yesterday I stood on it and a house opposite took pictures so I am assuming they a going to report it. I am so worried as without it I am not keen on the flat.mif I were to resell it now would I have to pay capital gains tax? Redecorated and new kitchen and bathroom is the minimum I cold get away with and would probably increase its value by 25k ish. I am not living in it yet but planned to move in next month once plumbing sorted and now not sure I want to!

moneyistooshorttomention

As I recall, I've read on here that it's not possible for a new would-be owner to be able to get a mortgage on a place if the previous owner had only had it for a very short period of time.

Think it's three months??? that you would have to own it for before you could sell it to anyone needing a mortgage?

I wouldn't think an extra £25k would be added to the value by redecorating/new kitchen/new bathroom. I would imagine you would gain little, if anything, on the sale price by making those changes. I was noting, for instance, yesterday that a basic kitchen with standard number of units could be obtained from someone like Wickes for only around £500 (not including labour to install it). My own very very rough guess would be that I could change my existing kitchen and bathroom if I wanted to for no more than £5,000 (including labour).

noddynoo

Thanks that would be ok would take more like 5 to do all the work needed. My husband wants to keep going and see what the planners say as we are happy to apply and pay etc just didn,t know we had to as all the others have done terraces. There's no issue with over looking as too high so may be ok. Would we need to move into it to avoid CGt

noddynoo

We would make at least that as we bought it as a repossession and flats on the road go for a lot more than we paid. Finish would be top spec not b and q etc. flat opposite bought last year for 245 sold last month for 320 :eek: very nicely done but still a flat. This road is very desirable and I know it sounds daft but things sell

moneyistooshorttomention

I was wondering what sort of area the flat is in. The location makes a difference to what it's worth doing to the interior of the place.

I've compared prices between my reasonably top-ranking area and a pretty bottom-ranking area and found that the owners of many houses in that bottom-ranking area expect to charge the same for their houses as we do. From that, my conclusion was they need to have their places up to top spec. to be able to charge "our" prices too and, in reverse, that we don't need to bother ourselves nearly as much about the state of our individual properties (because people are only paying us the same as for those in the worse area) iyswim. Accordingly, I haven't bothered to change my kitchen - though it needs it - but would have if I were in the worse area.

So - with you saying its a "desirable area" - then I suggest part of your research should involve what similar places are up for sale for in worse areas to help base your calculations on what to do to yours on.

I would say that you look to be in line for a profit on the place whatever you do or don't do - but that CGT question arises - and you need someone who something about CGT to come along to answer that question for you.

noddynoo

Thanks I agree.

Yorkie1

I *believe* that if you bought the house as a doer-upper to be sold on immediately afterwards, then it is effectively a business and you would be liable to income tax on the profit.

If that wasn't the plan, and you've just decided to sell it, then CGT would come into play for any increase in value. However, given that you have an annual allowance before it is levied, it may not be a major consideration.

Six months is the period of time you generally need to have owned a property before selling it on, in order to avoid the buyer having difficulties obtaining a mortgage.

noddynoo

If when we sell it we buy somewhere else straight away do we have to pay CGT or is it income tax?

blckbrd

Does the roof terrace show up in the lease plan? If not you may have issues with the freeholder.

Tried checking the council planning portal if they have one?

noddynoo

I am the freeholder!

noddynoo

Def no planning none of them have