How long does planning permission last?

Any new construction, whether it's building new housing or offices, will require planning permission. If you are seeking to obtain planning permission for a quick sale and turnaround of your land, you should be aware of the timeframes and necessary protocols.

Planning permission is subject to thorough checks and conditions. It can be complex to navigate the legalities, but it is a requirement by law. If you've already obtained it, you should be aware that this is a central instrument of building law. So how long does this last before it becomes obsolete?

How long does planning permission last?

Once you have obtained planning permission, you will need to know how long it is valid. By law, it only lasts for three years from the date it is granted. Within this time, you must have made a substantive start on your site, such as constructing foundations. However, once you have started development, planning permission lasts indefinitely.

If there are any exemptions to the three-year rule, this will be stated in your planning permission. If you're unable to start the works within the allocated three-year period, you may have to fully reapply. You can extend your permission to four years or beyond, but only if the work has not yet been carried out. If you need to postpone it then you can apply online.

Why do you need planning permission?

All new construction is regulated by the government, so any type of land development will need planning permission. To acquire planning permission, you need to demonstrate that the development you are seeking meets your local council’s local plan, as well as the government’s National Planning Policy Framework, amongst other legislation.

To obtain planning permission, you must submit plans and proposals to your local council, where they will be reviewed by an officer. If the officer is in favour of your proposal, it is subsequently forwarded to local councillors for approval.

Please keep in mind that this is a highly simplified representation of what can be an extremely bureaucratic process, with many variations that may need to be considered.

If you commence building work without the necessary documentation, you could risk a hefty fine and you may be ordered to rebuild any property which you have demolished. Despite the desire to add value to your land, you should make sure you have proper permissions in place before starting any works.

Landowners or property owners often acquire planning permission for two reasons: to build out the new planning permission, or use the planning permission to sell their land. After all, it seems desirable to both buyers and sellers to already have land that is legally ready to be further developed on.

Is planning permission right for you?

Acquiring planning permission can lead to an increase in land valuation, but gaining planning permission yourself may not necessarily be the best option.

It is a costly and subjective process with no guarantees of success. Any submission must comply with the plethora of local Council rules and regulations, including their local plan.

Afterwards it must adhere to national planning guidelines and, in most situations, neighbours or local residents will object.

It may be better to approach a reputable developer that is professional and experienced in maximising the value of your land, whilst taking on all of the planning risk involved, including costs.

If you'd like to know more about planning permission or if you're in possession of a plot of land you'd like to sell, get in touch with us today. Our team of experts can help you arrange a free, no-obligation quote.

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Do you pay Capital Gains Tax when selling land?

One of the biggest issues for property owners is capital gains tax, which can cut into the profits made over an extended period of time through investing.

However, you may not be aware of whether or not the sale of land is also susceptible to capital gains tax. In this article, we discuss the impact capital gains tax can have when selling land.

Do you pay Capital Gains Tax on selling land?

First and foremost, if you’re planning on selling your own home – including your garden – you do not have to pay tax on the sale up to 1.25 acres. However, if you’re planning on selling other types of land, you may be susceptible to capital gains tax.

A sale of land or property will usually invoke a capital gains tax (CGT). This is calculated as a set percentage of the sale price, with the purchase price and any qualifying improvement expenses removed.

The percentage paid in CGT varies depending on the nature of the selling entity. For example, in the event that an individual sells undeveloped land, the gain is taxable at 20% rather than the 28% CGT rate seen on the sale of developed properties (since the land hasn't been developed).

On the other hand, if the entity holding the land is a company rather than an individual, the tax amount shifts due to different legislation. In this case, any capital gains are taxed at the same rate as corporation tax, currently standing at 19% in the UK as of the time of writing.

Are there any ways of reducing the tax burden?

The way that taxation works means there are some ways available to land investors that can increase the profitability of land by reducing the tax burden. This requires planning in advance and varies depending on the nature of legislation at the time of reading this article. Policies regarding tax can change, and a single UK budget announcement can potentially change tax amounts significantly.

One way of reducing the tax burden is by setting up a business for trading land and properties. This is because the tax rate of capital gains differs from that paid by the individual to that paid by a corporation, as individuals pay 20% tax on their capital gains compared to companies paying 19%.

This seems like a minimal gain, but each and every minimal gain in the world of finance adds up. An example of comparing capital gains tax and corporation tax in terms of land sale can be found below.

An example of taxation in selling land

Jonathan bought his plot of land for a value of £100,000. In the time since purchase, Jonathan spent a total of £20,000 on increasing the value of his land, increasing his investment in the plot of land to £120,000.

Market demand shifts mean that he sells the land for £220,000, leaving capital gains of £100,000.

As an individual, Jonathan pays 20% of this (£20,000) in capital gains tax, leaving Jonathan with £80,000 in profit.

On the other hand, Sarah bought the adjoining plot of land, also for the value of £100,000. Sarah matched Jonathan's investment of £20,000 (for a total investment of £120,000) and then sold her land for the same final total of £220,000.

Initial profit on the transaction remains £100,000, although Sarah bought and sold her land through the company she built to process her investments and transactions. In this case, Sarah pays only 19% tax on the profit, giving £19,000 in capital gains tax and keeping £81,000 for herself.

This difference is quite small proportionally, but if you're a business that frequently deals in land sales then it can be beneficial. The extra £1,000 Sarah saves by operating through a company is further investment funding for future land purchases, and her portfolio increases over time as a result of her planning the purchase and sale ahead of time.

Make the most of selling your land with NFC Homes

If you're looking to sell your land for the optimal value, consider NFC Homes.

We have a wealth of experience in trading both homes and land, providing a fully informed and reliable land acquisition service you can rely on. Thanks to our years of work in the industry, our friendly team works with you in a helpful and reliable manner.

Contact us today to arrange a free, no-obligation quote for your plot of land.

Disclaimer: The contents of this article are for information purposes only. We strongly recommend seeking professional advice before making any decisions regarding the sale of your land.

What is brownfield land and can you develop new homes on it?

For years now, the UK government has been pushing for more and more developers to make use of brownfield land. This is land that has been previously built on – whether it’s been past houses, shops, schools or even parks.

It seems to be the sparkling solution to tackle the housing crisis without sprawling onto British scenery.

At NFC Homes, we have enough expertise behind us to know that brownfield land is a great investment on which to be able to build new homes, which is why our team have created this article. We want to be able to guide you through the process of what brownfield land is, how it differs from greenfield land, and whether or not you can develop new houses on it.

What is brownfield land vs greenfield land?

Brownfield and greenfield land are two terms that are used in conjunction with one another. As we covered in the introduction, brownfield land is a site that has previously been developed. Greenfield land, however, is an undeveloped land site typically used as paddock land or for agricultural purposes.

It's important to note that greenfield land is not the same as the protected land located within the greenbelt, so greenfield land is usually not subject to the same protection laws.

Should I develop new properties on brownfield or greenfield land?

The development of land using a brownfield site may be more practical than greenfield land, since it's generally easier to obtain planning permission for brownfield sites.

Additionally, developing land on brownfield sites reduces the rate of urban sprawl, and also comes with an increased likelihood of having established infrastructure present and/or close by.

Do I need planning permission to be able to build on brownfield land?

To be able to build on brownfield land, you will need to seek planning permission from the appropriate governing body. However, as mentioned earlier, you are a lot more likely to gain planning permission if it’s brownfield land that you’re intending on using.

This is because the government is backing the use of brownfield land over greenfield, and sources show that they have pledged to use around £400 million to aid the use of construction on brownfield land as opposed to greenfield land.

How do I apply for planning permission on brownfield land?

After reading this, you may think that gaining planning permission on brownfield land is a simple task. Unfortunately, this is not the case. Government planning parties have their own rules of regulations that your proposals must adhere to before they’ll be approved, and this can be rather difficult in itself.

Gaining planning permission can be difficult as you have to bear in mind all the small details of your development process.

How are vehicles supposed to access the land? How much contamination will the local surrounding area be faced with as a result of your development? Is your development imposing on the heritage of the area you wish to build within? Is the noise coming from your development exceeding local levels?

It's questions like this that can be hard to manoeuvre. Not only this, but the waiting time to hear back from authoritative bodies, along with the financial burden involved, can be the tipping point for some developers.

Is there any other way?

You may be wondering now if there’s another way in which to acquire planning permission to build on brownfield land. At NFC Homes, we’re experts in the field and have the know-how to be able to navigate the minefields of planning permission to be able to build on brownfield land.

By selling your land to a developer, you won't have to deal with the endless stacks of paperwork and can move on hassle-free with a payment based on land valuations.

How to value your brownfield land

Before passing on your brownfield land to a developer, you may want to enquire about a land valuation to ensure that you’re getting the best possible price. Our experts can help you to do this.

For more information on how brownfield land differs to greenfield land, and to find out whether or not your land is suitable for development, contact us today for a free, no-obligation quote.