Planning Permission - % Add to House Price?

[gc12312]

Hi there,

I own an end of terrace house in Dublin 12. There is room on the side of the house for a "2 bed townhouse". I looked at this idea before; to build the new house and move into this and rent the existing one but the idea never got off the ground. There are a few nearby which have done this, so there was a precedent set back then.

Either way I'm planning to sell this house this summer. Like most I owe the bank more than the value of the house and am looking at ways to increase the sale price of the house. Was thinking of going back through this process to submit the plans and apply for P.P. for this new dwelling to sell the house "with P.P for a 2 bed townhouse"....

Just wondering what sort of % would this add to the sale price? Assume:
1) 3 bed end of terrace is worth c. 180k
2) the 2 bed townhouse could be built on the side of the existing house and just reduce it's "side garden"

Am wondering is it worth going down the road with this idea. I have a friend who is an architect who offered to help with the plans so might just be the cost of the P.P. Any ideas?

Thanks
G

 

[Mrmr]

I think you'll lose a % of 'development profit' to CGT as it's not simply a PPR sale? Could be worth a few bob though.

 

[gc12312]

ah ok, hadn't thought of that. Might still be worth it but will definitely check that one with the accountant!

 

[dereko1969]

I think you'll lose a % of 'development profit' to CGT as it's not simply a PPR sale? Could be worth a few bob though.

But the OP won't have realised any "gain" as they're just selling their PPR to which they may have added planning permission but that's it.

I would doubt there's any chance of CGT applying if only planning permission is added. If the land to the side of the house on which the property might be built was sold separately then perhaps but that's not what the OP is proposing to do.

 

[Mrmr]

Have a quick look on the revenue website, here's the basics:

Exemptions:
Private Residence [broken link removed]Page 15, of CGT Guide (PDF, 942KB), point 5.
Gains made on the disposal of your home together with its gardens or grounds up to an area (exclusive of the site of the residence) of one acre may be exempt. For full relief to apply, you must have occupied the home as your principal private residence throughout your period of ownership or to within 12 months of the date of disposal. Relief may be restricted where the home was not your main residence throughout the period of ownership (other than the final 12 months), where any part of it was used exclusively for the purposes of a trade, business or profession or where it is sold as development land, for example part of the garden (see [broken link removed]).

Maybe I'm wrong, I thought if the sale attracted a higher value due to development potential there was a liability for the difference between sale and sale+dev land.