Can I pay for land separate from house purchase?

Country_Cottage

Hi

I'm buying a house that currently rents its garden from the council. The vendors have agreed a sale on the house of £250000 but say they have an option to buy the rented garden and are offering to sell that to us separately for £10000+

Given that the garden is not part of the house but would be owned by the vendors of the house-would this count as one transaction and therefore be liable for Stamp Duty?

Thanks

eddddy

According to the HMRC website:

There are some situations when two or more property transactions that involve the same buyer and seller are treated as being 'linked' for Stamp Duty Land Tax (SDLT) purposes. People connected to a buyer or seller can count as being the same buyer or seller.

source: http://www.hmrc.gov.uk/sdlt/calculate/linked-transfers.htm

So if you buy both the house and garden from the same seller, I suspect that HMRC would see them as linked transactions, and stamp duty would be payable on the combined total.

If you can change things around, so that you buy the house from the seller and buy the garden from the council, you might escape the higher SDLT.

googler

So they're offering to buy the land from the council, then sell it to you? Why?

Why don't you just buy the house then buy the land from the council?

More to the point, what guarantees are there that the council will actually sell the land to the current owner, or to you?

00ec25

it would undeniably count as a linked transaction for SDLT purposes as there is no way that you would buy the land unless you were also buying the house now is there?

as googler says if you buy the land yourself at a later date then that would work provided obviously it is still owned by the council at that date

getmore4less

Whats the rent on the land?
Any restrictions?
Could you rent it?
How much are the council going to charge them?
How much would the charge you?

I would what answers to all those(top head may be more) before even thinking about it.

jjlandlord

How is that land accessed?

If the only access is through the property, it will become useless to the vendor as the sale of the property complete, and thus the vendor has no leverage.

As he says he rents it from the council, you should check that and ask to see the lease. Then you can discuss with vendor and council about assigning that lease to you.
It would only cost you the legal fees if vendor has no leverage.

If he is proposing to buy that land then immediately sells to you with the property you can bet that he thinks that he can buy it for much less than £10k.

Building_Surveyor

Find out how much the rent is first of all...

AndyT678

Country_Cottage wrote: »

they have an option to buy the rented garden and are offering to sell that to us separately for £10000+

Are they selling the land or the option?

princeofpounds

Are they selling the land or the option?

Indeed. The most sensible course for you would probably be to purchase the house and purchase the option to the land (assuming it is transferable, normally they can be). You should also check to see the cost of the rent vs. purchase, renting can be better value if it's totally stranded land otherwise.

jjlandlord

If OP only purchases the option, the vendor would keep his lease. If OP then uses the option he would become the vendor's landlord, at which point the way to terminate the vendor's lease would depend on the lease itself.

If so it would make sense for OP to get the vendor out of the picture right away, perhaps through an assignment of the lease.

Richard_Webster

We are speculating that:

1. The option is assignable; and
2. The lease is assignable.

What is the position?