Developer making offer on 1 metre strip of ground around house

L

lonelyplanet

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Posting on behalf of friend who has been offered 20K for approx 1m strip of land at side of house in housing estate to facilitate the construction of more houses in the estate....

Question: Will they be liable for CGT on the 20K and if so how much ??

Could they request developer to build extension instead of giving them 20K and if they went this route would they still be liable for CGT?


Thanks
 
I, not a tax adviser. I believe if the House in Question is PPR of your friend. Revenue will allow the Garden (within reason ) to be included as been exempt of CGT. So selling 1-meter strip of land from his Garden should be CGT exempt. I simply ring revenue to confirm and get it in writing or Link to ebrief were they has this set out on their website.
 
I would certainly go the route of extension subject to PP and tax liability. That is if the developer would agree on a deal. No harm in having a chat with him/her, might have "other options" too. Just remember if he/she's going to get the strip of ground, they'll have to show how that was achieved as they hardly got it for nothing but you're in a nice situation that may never repeat itself.
 
If the sale of the strip for cash is subject to CGT, then the sale in exchange for an extension will also be subject to CGT.

I have no idea whether it is or not though.

Brendan
 
thanks for the feedback ..This is their PPR ( which I forgot to mention) and thus guessing that the 20K would be CGT exempt...
This person would prefer not to sell as no intention of ever moving from this house but thought that they might be liable for CGT.
My thinking is that if they have no intention of ever moving and would like an extra room/rooms then it might be worth looking at getting an extension built subject to planning....
 
I had looked into something similar for a colleague.

If their was a "development value" then a part of the amount would be subject to cgt over and above a "open space" value.

20k would not be considered development value and it could easily be argued that the value of the house would drop a little due to this strip.

If I can find the link on the revenue website, I'll post it.

But I'd be near certain that at that level no cgt applies
 
Chapter 4 gives you the info.
[broken link removed]

I'd try and go for and extension to be built - better for both parties and unless an extension was previously built and new extension is under 440 sq ft, it will most likely be exempt from planning. (some restrictions apply)
 
Don't know the answer on tax but an extension will cost much more than €20k so they are unlikely to get that in exchange.
 
SBarrett said:
Don't know the answer on tax but an extension will cost much more than €20k so they are unlikely to get that in exchange.
Click to expand...
I suspect the strip is worth a lot more than 20k to the developer, so I'd show some concern for extra traffic and noise, look for 50k+ and negotiate down to an extension.

Probably worth 40k to the owner and cost 20k or so to the builder.
 
SBarrett said:
Don't know the answer on tax but an extension will cost much more than €20k so they are unlikely to get that in exchange.
Click to expand...

Yes and No. The cost of €20k is just that to the builder, but an extension may not be that much to the builder although it would be worth a lot more to the householder.
 
I would take the cash. The builders are going to look after their own interests so they are not likely to be nice and simply knock 20k off the build price.
I would take the money and do a separate deal on the extension in your own interest
 
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