Implications of buying a site with PP but just as an investment

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AndroidMan

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There is a plot near me for sale, along with PP for a house.
I have no intention of building on it but am thinking it could be a worthwhile investment.
I would not need a loan to buy it.

Do I have to pay any extra taxes considering is second home, even though there is nothing built on it?

What about any other concerns, such as insurance - say somebody jumps over the wall and has an accident?

Does the PP expire after a period of time?

I would keep it a few years and then probably sell on, I think at maybe 10% profit.. but who knows there!

Anything else I need to think about?
 
Planning does expire - I think it's typically after a five year period.

Yes, there's stamp duty on it. There would also be Capital Gains Tax on any profit made.

It would be prudent to have public liability insurance on it, otherwise you are personally exposed. If you buy it, you'll also need to secure it - against trespassers, squatters etc.

I think it's a bad idea to buy, then hold as is. You run the risk of the property losing value, the planning permission expiring and not being renewed (if sough), and its an investment that won't generate any income while you hold it.

Buying it, developing it, then renting it out, or selling it on, makes a bit more sense. Particularly, if its suitable for the long term rental market, and likely to be a sought after location. However, if you go that route, make sure that you've got sufficient funding in place to complete the project - Banks don't like lending on partially completed projects. You'll need a good architect, to oversee the project for you. Also, construction costs are high at the moment, good builders not easily found (and as for them sticking to fixed price contracts, there's always an excuse to have to add to the original contract price, so go in expecting to pay 15% more).

Don't fall for the "it's easy money" line, there's no guarantees here and generally, people coming into property development transactions without relevant experience (and when the market is high, like now) , don't do well with their first time transaction (as what they make, if anything, tends to get gobbled up on paying third party costs etc. when sold only a couple of years later).
 
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AndroidMan said:
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I would keep it a few years and then probably sell on, I think at maybe 10% profit.. but who knows there!

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I don't get it? On what basis do you think it'll appreciate by 10% in a few years? If that's, say, three years, then that's a capital growth of ~3% before tax per annum. Before tax. Before expenses too? Which is not exactly a stellar return on investment. And you're lumbered with a very illiquid asset at that.

There are better homes for your money, I think! Just as an example, Dublin residential apartments are yielding rents of about 8% pa plus the prospect of capital growth.
 
AndroidMan said:
Anything else I need to think about?
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There is a housing shortage.

Developers are heavily criticised for hoarding land.

It's quite possible that some form of penalty would be introduced for not building on rezoned land or land with planning permission.

As BB says, there are better homes for your money.

Brendan
 
There was a plot across road from me half acre sold back 25 years ago 3 grand .It was just abandend since, the purcharer died last year and his family put it up for sale gone to 75k will be sold subject to outline planning .Any land with frontage will always have value ,they stoped making some while back!
 
wheeler dealer said:
Any land with frontage will always have value ,they stoped making some while back!
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But ever increasing planning restrictions and environmental standards in the building regs mean it is impossible to get planning on an increasing amount of that land.
 
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