Would CGT Tax be Due If I Buy Two Properties, but Knock Them Into One?

Becca

As a potential first time buyer, I was looking at a house which is for sale to use as my principal residence.

It is a three storey terraced house with a basement. However, the basement has been converted into a separate self-contained property, with separate deeds for this basement property.

The builder who converted it is the owner of both the house and basement property and is selling them at a discount because he has found them difficult to sell in their current state. No-one wants the basement flat as it's tiny, and he seems to have put off families from purchasing the main house because they don't want someone living in their basement!

So I would possibly be interested in buying as he's offering a discount on the total price if both properties are purchased by the same buyer. I'd be interested in purchasing both, with the intention of knocking it back into one house with its own basement i.e.one property with one set of deeds again.

My questions are:-

a) Is there a certain amount of time in which to get the property physically put back into one property, and also to get the deeds back into one set of deeds, so that in many years time when I resold it could not be said that at one time I had both a primary residence, and one investment property. If someone has a primary residence and an investment, then CGT tax would be due on the investment property. Neither property would be rented out whilst it was being changed back to one property.

b) Is it difficult/expensive for a solicitor to have the deeds for such a house/basement to have the deeds for each property made back into one set of deeds?

c) Any other hints/tips I should be aware of about such a situation...?

Thanks for any help/advice!

Becca :j

GDB2222

a) Assuming you do this all pretty quickly, I can't see a CGT problem. If you let the basement out for a year or two before knocking it into the house, there could be some CGT on that part when you come to sell.

b) No, it's easy

Becca

Thanks!

If I need planning permission to convert back to one property, would there be any way I could find out how likely the planners are to allow bringing the building back to its original layout? i.e. one house with its own basement?

Or would both properties have to be purchased, and apply for permission then...(which sounds potentially risky!)

divadee

call your local planning office and explain the situation. They are normally very helpful and would give you a rough idea of if it would be allowed.

I would say that there would not be a problem at all, as you are returning the house to its original state. Also planning may not be required, all that would be required would be building regulations approval. They come out at certain times through the project and then sign it off at the end. Hope that helps

Kenny4315

I assume that the property is probably some sort of townhouse with separate basement. In my view planning permission would almost definitely be required, as it is a change of use, to incorporate in back into the main house. Although, I would think that this would be a formality. A word of warning though in terms of the building works these types of jobs can be very expensive indeed. Electrics/Gas/etc back into single unit ain't cheap, plus any structural work required. Obviously I don't know the house but I do know these jobs can be very expensive if the initial conversion has messed up the original structural configuration, ie staircases, etc.

One guy at the top of our road bought a 3 storey townhouse, with basement, converted to single dwelling (was appartments), cost to date over £100k. If he's a builder why ain't he doing the conversion himself ?????