The laws around selling land can seem complex if you’re a first-time landowner. Of course, there are professionals there to guide you through the process, like conveyancers and specialist land agents. However, it’s useful to have your own understanding of the law around selling land in the UK so you can feel confident you’ve found the right buyer and made the best choices for yourself and your land.
Read on for your practical guide to the law on selling your land in the UK.
Is selling land similar to selling property?
There are similarities in the processes involved when you sell land or sell a property.
For example, both of the legal processes involve contracts, title searches and conveyancing.
You will also get a valuation to determine the value of your land, as you would with a residential or commercial property, and potentially enter into negotiations on price.
However, there are differences around the tax implications, the state of the market and the potential use of your land.
Unlike property sales, when someone comes to buy your land, they will consider the planning status and potential for different types of property development in the area.
Just like a house sale, for land in high demand areas buyers are willing to pay more.
Whether you have planning permission or not is a key factor in the value of land and how quickly and easily you can sell.
You have a piece of land: what next?
The first step in the process of selling a plot of land is to confirm you have full ownership over the freehold.
This is a simple process you can conduct yourself by visiting the HM Land Registry website – here, you can search online and download copies of the property summary, title plan and title register. If you believe the land to be yours but it’s not yet registered, you can do this yourself online or work with a solicitor.
You or your solicitor should have the title deeds for your land – this will include any existing paperwork on current and previous ownership of your land.
How can I legally sell my land?
There are three main ways to sell your land – find out more below to decide the best way to sell your plot.
Private sale
A private sale takes place directly between you and a buyer.
You will organise a valuation, list the land with estate agents, and manage viewings and offers. Then, you can engage solicitors to handle the legal side of the sale once an offer is agreed with your buyer, and they will oversee contracts and title transfers.
A private sale can give you more control and flexibility over the process, but it can take longer to find a buyer – so, if you want to sell land quickly, this may not be the best option for you.
Sell land at auction
It is also possible to sell your land at auction. Similar to a property auction, this will involve a public listing and bidding process, where the highest bidder wins.
Selling plots of land at auction can take place in person or online, and you’ll set a minimum acceptable price based on the value of your plot.
Partner with a land specialist to sell your land
Selling your land through a specialist land agent can be a great option if you’re keen to get the best value and maximise the potential of your plot for good.
Find out more about the different ways to sell your land for development – including conditional and unconditional contracts, as well as options agreeements – and the benefits of working with a specialist land agent.
What are the legal considerations for selling land?
Written contract of sale
Whichever route you choose to sell the land, the law dictates that land sales must be documented in a written contract, with clearly defined terms set out for both the landowner and the buyer.
Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 says:
“A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document, or where contracts are exchanged, in each.”
Your contract will be prepared by a solicitor and signed by both parties.
Restrictive covenants
In some instances, a restrictive covenant may be in place within the title deeds limiting what can be done with the land.
Designed to protect the land, examples of restrictions could be the type, height or style of buildings that can be constructed on the plot, or even the kind of materials which are permitted to be used.
This can have an impact on its sale – for example, incurring additional legal costs, lowering the market value, or complicating the process of obtaining planning consent.
Section 106 Agreements
Section 106 of the Town and Country Planning Act 1990 refers to a planning obligation placed on developers to offset the impact on the local community and ecosystem.
Section 106 agreements are designed to ensure new developments enhance a local area.
So, a Section 106 agreement might include planting trees to counteract the carbon footprint of a development, including a certain percentage of affordable homes within a development, or providing community facilities like play areas or community centres.
Planning permission
Often, landowners are under the impression that they can only selling land with planning permission in place.
When actually, you can sell land without planning permission.
While it may affect the sale price, it is an option if you’re looking to sell land fast and don’t have the time or expertise to navigate the planning system.
However, a specialist land agent like Collaborate Land can help you determine how much your land is worth and manage the planning application process on your behalf, even covering the costs in some instances.
Environmental considerations
There are various environmental considerations to bear in mind when you need to sell a piece of land.
These could include:
- Possible contamination
- Hazards like flood zones
- Soil and water quality
- Adhering to regulations around endangered species and air quality
- Any historical or cultural implications
While you can look into these areas yourself, it can be beneficial to work with a land specialist who has a deep understanding of environmental and ecological factors and can help you to meet all the necessary regulations to get the best value for your land.
Tax liabilities
To ensure a smooth process with no unexpected complications or costs, it’s important to understand the tax implications of selling land in the UK.
The main tax factor to be aware of is Capital Gains Tax which applies to the profit from your sale.
For basic taxpayers, the rate is 10%, rising to 20% for higher rate taxpayers.
Stamp Duty is usually covered by the buyer, but it is a factor that can impact the sales process.
VAT (value added tax) may apply to your sale if you are VAT-registered, or your land has been opted for VAT.
If you inherited your land, there is also Inheritance Tax to think of – the value of the land will be included in the estate for Inheritance Tax purposes, and this could potentially affect the overall tax liability of the estate.
To navigate the tax implications of your land sale, you can speak to a tax advisor or work alongside a specialist lead developer for affordable housing, like Collaborate Land.
Looking for support with the sale of your land?
We work with landowners across the UK to support them through the selling process, navigating the legalities, planning system, and tax implications.
The complexities of land sales don’t have to be your responsibility – with the right partner, it can be a smooth and simple transaction for you that ensures the best use of your land and optimal value for you.
Let us liaise with planning officers, Land Registry, solicitors, tax advisors and prospective buyers on your behalf and make sure your land is used for good.
Are you interesting in exploring your selling options and getting support to secure the right usage and price for your plot?
Get in touch with our friendly and knowledgeable team to sell your land with confidence and ease.
