Like you, every property is unique, so we’ll just need a few details before we can make you an offer.
If you’ve recently inherited land but aren’t too sure what to do with it, then look no further. Here at We Buy Any House, we’ve put together a handy article to make sure you know everything you need to know about your options.
What can I do with it?
There are a few choices for you to consider. You can-
Build on it
Hold onto it as is.
The main benefit of inheriting land over property is that there tends to be much less maintenance and upkeep than you would have to put into maintaining a house, but the negative is that you can’t usually utilise the land by living on it straight away, and if you decide to rent it out you won’t create an income in the same way that you would from renting a house.
You will still need to maintain the land, however, as it is your responsibility to:
Keep any grass cut
Keep the land secure
Prevent any trespassers
Maintain any buildings on the land, such as sheds.
Are there any extra costs or taxes?
One of the key factors that inheritors tend to consider when deciding if they want to keep or sell land, is if there are fees incurred by either option.
Usually, any outstanding debts of the deceased will be settled and paid by their estate, but this doesn’t always cover the amount. It can depend on-
The value of the estate; if it doesn’t cover the debt, you may be liable to take on the payments
Your relationship to the beneficiary
How the estate was settled
Any costs unrelated to the inheritance, such as general land ownership.
As long as there are enough liquid assets, these will pay any taxes incurred such as inheritance tax. Inheriting land doesn’t tend to affect income tax so you shouldn’t have to worry about that, but you may potentially be liable for capital gains tax if you decide to sell the land and make a profit from the original value.
You may also want to consider insuring the land, to make sure that you’re fully protected from any potential liability claims on the land, especially if you’re not able to keep it fully secured from the public, and keep you covered if there is any loss.
What if there’s a loan on the land?
When you inherit land, you also inherit any outstanding loan that may be attached to it. It’s a common misconception that debt is cleared after death, and can actually mean that the debt is due to be paid in full. It’s not overly likely that there is any debt associated with the land that you’ve inherited, but it is still a possibility. There also could be other debt from the deceased that you have to pay elsewhere and could fund from this land if you’re struggling to make the payment. You can sell the land and use the proceeds to clear any debt.
Should I build on the land?
Depending on the location of the land you’ve inherited, it could be the perfect site for your dream home; or if it’s a bit far out, it could be a holiday home. It can be time-consuming and expensive, as you’ll need to work with architects, contractors and potentially apply for permission, but it gives you the freedom to design your house down to the tiniest detail and ensure it’s exactly what you’ve always wanted.
What’s the benefit of selling?
Selling your land can free up funds so you can invest it elsewhere. You’re unlikely to have to pay any capital gains tax if you do sell, as the land is most likely going to have kept the same value from when it was originally purchased. It is worth knowing that if you choose to sell you should expect it to be a very slow process, as it can take a long time to finalise a land sale.
Overall, if you’ve inherited land you’ve got a choice as to what you do with it. You can take some time to weigh up the pros and cons and see what will suit you best.