There’s no better way to maximise the value of farmland than by selling for development. But what you do with the profits can make or break your business.
The good news is that developers who withdrew from the market after the crash are now returning, with many sales scheduled to proceed, and sooner rather than later.
Similarly, landowners on the edge of existing developments, or those with land earmarked for new settlements, are finally seeing deals complete. And we’re talking big sums, especially over a sizeable scheme.
However, with development on the rise again, maximising your profits on land sales can be harder, since one of the best ways of doing it is to buy more land. Securing the right sites at the right prices has become highly competitive.
Based on extensive experience within the rural land markets, here are our top tips for securing value for the long term.
Know your tax stance
Once a sale completes, landowners can off-set a potentially high capital gains tax liability by re-investing the proceeds – or rolling over – into a similar qualifying asset.
Find out about the market near any potential development or farmland purchase. There’s nothing wrong with contacting agents in the area and asking their opinion.
Be clear about your strategy
Not all property will be right as an investment. We are increasingly asked to advise on a reinvestment strategy, specifically to find suitable replacement property from the limited supply of land on the market. This is a specialist service we provide and our experts have in-depth knowledge of their local market. And with more than 90 offices across the UK, our rural land advisers have the market thoroughly covered.
You will rarely acquire the first holding you see. Good lots often attract several other bidders.
Many deals are done off-market and in some instances the farms or property will not qualify for roll-over relief due to tenancies, other agreements or the nature of the holdings.
For more information and guidance, contact Savills farms and estates services team.