Should we buy the land.......????

Pedder5

Hi All,

I hope someone out there can help!!

We live in one of 3 terrace cottages that join a fourth house that is considerably bigger.
The owner of the larger house nest door to use on the end ( we are the second of the 4 ) has offered us a piece of land behind the other 3 house including ours.

Basically each of the three cottages has tight parking for 2 cars.

The land at the back is 350m squared and has the potential to offer us additional parking and also release parking at the front to convert to additional garden.

The question......

When we first spoke to the owner it was muted a figure of £5k as a purchase price back in August last year.

Now it has been valued by a surveyor @ £15k....considerably more. However as a stand alone piece of land it is not worth anything in our opinion as the owner can only sell it to us ( it's not big enough to build on and in an area of worth only to us ) and will not sell it to either of the other 2 properties.

Valued against an increase in the value of our property then yes £15k would be reasonable as it would increase the value of our house by more than this. However we would only want the land for parking

So questions:

1: Would the owner have to pay Capital Gains Tax on the sale of the land?
2: Should we go back with a small offer of say £2k
3: Should we have the land valued ourselves?

We really want the land but cannot justify the price tag!

Any help and advice gratefully received.

AdrianC

He can ask any price he wants - you can refuse to pay it.
You can make an offer - he can refuse to accept it.
Either of you can use whatever means you want to try to decide what to ask or offer, whether that's valuers or a wet finger in the air.

If the house is his primary personal residence, then - no - no CGT.

Pedder5

Thanks Adrian,

The house is a Bed & Breakfast, but also their primary residence. Does that have any affect?

AdrianC

None whatsoever.

B'sides, their tax bill is absolutely irrelevant to whether they're willing to sell some land to you for a price you can both agree on. It's a red herring. Ignore it completely.

federer6

He Has the right to ask any amount he want but you can always refuse to pay it also you can include a third party like agency it will be so useful to give you great advices

eddddy

If everyone was being rational (in the economic sense)...

- You would ask a few EAs how much the extra land is likely to increase the value of your house (let's say it's £20k)

- The neighbour would ask EAs how much the loss of the land would decrease the value of their house (let's say it's £5k)

So you negotiate a price somewhere between £5k and £20k (depending on who negotiates best, who is more desperate etc)

But buyers and sellers don't always behave rationally,

whitewing

What stops him selling to the other two?

It may not be worth it for £5K but £15K may mean he feels more flexible about that.

[Deleted User]

Post made in error

maninthestreet

'350m squared' ??? How is that 'too small' to build on. Even if you really meant '350 square metres', that's still big enough to build on.

Davesnave

AdrianC wrote: »

He can ask any price he wants - you can refuse to pay it.
You can make an offer - he can refuse to accept it.
Either of you can use whatever means you want to try to decide what to ask or offer, whether that's valuers or a wet finger in the air.

^This

Some years ago I offered some garden to four properties which backed onto it. Looking at how much adding 1/4 of it would increase the value of each property, I calculated that it was worth £x overall.

The first offer the 4 made was roughly 50% of £x, so I rejected it and left the matter for them to chew-over.

After a few months, the potential purchasers commissioned a surveyor to value the land and produce a report, which they sent to me. It valued the plot as "garden land" and the estimated value was 60% of £x.

I replied saying I didn't care what their unasked-for survey said, I still wanted £x.

They replied that I'd be unlikely to sell to anyone else.

I didn't respond.

The stalemate continued for about a year. The land began to get overgrown. Then, one day the most affable of the 4 rang me and asked what I'd accept.

I replied, "£x."

A few months later, all four met with me and offered ....£x plus all the legal fees.

I thanked them and the sale went through.

They had a bargain, but they didn't seem to know it. :rotfl:

moneyistooshorttomention

Which I've just interpreted as meaning the Fair Price to pay is 60% of any "added value" the house gets from having the land.

Therefore if the land adds, for instance, £10,000 to the house value then the Fair Price for it is £6,000 plus purchaser paying legal fees.

Though - as pointed out - the vendor may ask for a higher price than a fair one.

Personally speaking, in that situation, I'd pay up to a Fair Price. I wouldnt pay any more than that and would think "Oh well - their loss" if the vendor wouldnt accept my money and I wouldnt buy the land after all (ever).

Some people would be prepared to overpay. Some not. I'm in the "not" camp personally - as it would "nag at me" every time I used the land and I'd feel irritated by it and would be remembering what else I could have done with the money I'd overpaid.