Selling part of your garden/property

Having your garden or property valued
To find out whether a sale of your garden or property is worth it, you should have the area you intend to sell valued by a surveyor. Whilst doing so, you should have the surveyor value the house and remaining land you wish to retain. This will give you an indication of value.

It is also important to consider the difference in value between the plot with and without planning permission. This will inform your decision on the best strategy for sale.

Check the Title Deeds and Boundaries
It is critically important to identify the area of land you wish to sell off. You must make sure you own it as part of your property. This means checking your title deeds and the boundaries of your property. When you sell off the land, you will split this off from your title. That means it is essential not only to check what you are selling but also what will remain.

It is important to have a professional draw up the map or plan showing the area of land you are selling. You should include access routes and location of utilities serving the land you are selling.

What happens if you have a mortgage
It is likely that if you have a mortgage over your property, the area you wish to sell off will be covered by the mortgage. That means your lender will need to consent to the sale and the piece of garden or property removed from the charge your lender holds.

Your lender will also be interested in the residual value of your property to ensure there is sufficient value to enable them to recover any mortgage outstanding in the event of a default on the loan.

Rights of way
Will this area of land you are selling need a right of way over the land you are retaining to allow the new owner access to it? If so, you must build in provisions for this.

Similarly, if you need a right of way over the land you are selling so you can access the land you are retaining, you must also build these in as conditions affecting the land you are selling.

Planning Permission
If you are selling your garden or part of your property for another house to be built, you must consider whether you should apply for planning permission yourself or leave that to the buyer.

If you apply for planning permission yourself, you will have control over the entire process and, if granted, can then market the ground with the benefit of planning permission. This will usually attract a premium in terms of price.

If you decide to allow the buyer to apply for planning permission, it is probable that the buyer will make the grant of planning permission conditional on the purchase. That means if the buyer is unsuccessful in obtaining planning permission, they could walk away from the purchase. Allowing the buyer to apply for planning permission also takes away your control of the process, leaving it to the buyer to work to their own timescale.

If you apply for planning permission, you can determine the style and extent of the house to be built on the area you are selling. If you leave the planning application to the buyer, you might end up having to object to the application because you might consider it to be overdevelopment of the plot! This would not be sensible and could prove expensive.

Neighbour and community considerations
You should think about the impact on your neighbours and how they might behave towards you if you sell off your garden or part of your property. You should consider if any development on the area you sell will impact on your neighbours and what they may feel about you if their enjoyment of their property is diminished.

Taking neighbours’ views into account before you sell may help avoid objections to planning applications and allow the sale to proceed successfully. Upset neighbours may do everything in their power to prevent the sale or the planning application being granted if they feel the sale has an adverse impact on their enjoyment of their own property.

Tax implications
If you sell part of your property you might face Capital Gains Tax (CGT) on the disposal value depending on the extend of the land and the purpose of the sale. If the property is your main home and complies with a number of other conditions, you will be eligible for Private Residence Relief. The UK government has an online checker you can use to find out if you need to pay CGT when you sell and how much Private Residence Relief you will get.

Discuss your sale with a tax expert to ensure all necessary steps are taken to mitigate the impact of CGT.

Consider the impact on the residual value of your property
Although there will be a gain on the sale of the part of your garden or property, you should also consider the residual value of your property once the sale of part has been completed. Will the sale devalue your property? Will the sale of the garden or property cause you problems when you come to sell? You must weigh up the pros and cons when you decide to sell off any part of your property.

Make sure the sales contract and documentation are correct
It is essential you ensure that the sales contract and supporting documentation are comprehensive and favourable to your sale. Instruct your solicitor when considering the sale of your garden or part of your property and seek their advice and guidance as to the best way of proceeding.

The sale documentation will contain all necessary conveyancing conditions and any other conditions regarding the build quality, style and location of any buildings to be erected on the property you are selling.

Will you be better or worse off if you sell your garden?
Only you can decide if you will be better or worse off if you sell your garden. You might make a financial killing but become unpopular with neighbours . You might regret selling off your garden because the house built is much bigger than you had envisaged.

You might spend time and money setting up the sale only to find it fail because the buyer lacked the capability to complete the deal.

If you do decide to sell your garden or part of your property, speak to your solicitor and tax adviser and consider all the angles before you go ahead.