MikeR

Group self-build Bristol

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MikeR    4

I've recently been lucky enough to gain outline consent for 9 self/custom build houses on my land in Bristol and I'm now looking to gather together 8 other people to organise a group self-build. Because the land is in a fairly desirable part of the city this project is aimed at the higher end of the market and not really suitable for any form of community self-build. Apart from the council's custom build register does anyone have any other ideas on how I can recruit 8 other members?

Thanks in advance.

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jack    417

You might get some interest just posting on here. :ph34r:

 

Perhaps try and picture what sort of person you'd like to share your land with, and figure out what they do and where they're likely to be found?

 

Also, estate agents may be a source of referrals, although they may be reticent if there's no incentive for them to pass on people on their books. Perhaps offer a finders fee if a referral from an estate agent works out?

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TheMitchells    66

also the local council will have a register of those interested in self build.  I am on several councils lists and occasionally get info of ones coming up in their area.  they could send out the details to those on their list. 

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ProDave    660

Why does it have to be a group self build? Can't you just install any shared infrastructure and then sell the individual plots?  That's how it happens up here.

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Ferdinand    413

@MikeR

 

Could you elucidate the question a little? On my scan read of your Application, you seem to commit to:

 

1 - Recruiting all your customers from the Council List.

2 - Appointing an experienced self-build Project Manager to run it.

 

I would appoint the Project Manager early enough for him to set up the organisation and recruit the members.

 

So I am not totally clear why you are asking about recruiting outside the Council List.

 

I have probably misunderstood something (?), or do you plan to change the terms later, or are you just exploring alternatives?


Ferdinand

Edited by Ferdinand

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MikeR    4

To answer some of the questions raised:

 

ProDave - unfortunately I don't have the available means to put in the road and infrastructure myself to enable them to be sold as serviced plots. In addition to this as the land is also my primary residence any sub dividing of it would also leave me open to capital gains tax.

 

Ferdinand - although I've stated to the council that my first "port of call" for group members would be their custom build register it's very possible that I might not be able to recruit everyone from it so I'm just trying to cover all the angles.

 

I thought I had managed to find a project manager to run the project from scratch but he wanted an option to buy my land (at what I considered to be a very low price) on behalf of future members of the group which was fine but when I asked him to justify his low offer price he wouldn't engage into any further discussions and I felt a bit uncomfortable with the situation so I turned down his offer.

 

My current plan is to try recruit the members myself and from that point onwards to engage the services of a project manager to run the scheme.

 

Hope this helps

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JSHarris    869

I believe that somewhere there is a detailed breakdown as to the way that the Graven Hill self-build scheme has been set up, and finding that information may help.  IIRC, there were some fairly complex tax implications involved, which resulted in the rather messy, and expensive and over-controlled, scheme they ended up adopting.  I'm not convinced at all that the Graven Hill scheme is in any way a good model, but looking at it may highlight some potential tax issues that need to be addressed, perhaps not in the way that they addressed then though.

 

One issues of these may well be VAT related, as each self-builder would ordinarily be able to either get work done on a zero rated basis, or reclaim VAT on completion, or a mix of both.  When it comes to shared assets, like the service provisions for multiple plots, then there are going to be some complex VAT issues that need to be resolved - the HMRC are going to want to know exactly how much of each element of essential work for each self-build is apportioned.  The access road and main services are presumably going to have to be funded by the plot purchasers, on some form of split based on plot size or value, and I suspect this split may need to be agreed with HMRC as being reasonable, in terms of VAT liability.

 

Dealing with capital gains tax is undoubtedly going to be an issue, as by gaining PP for the land you own you will have significantly increased its value, and, because the houses that will be built will not be your principal residence, there is bound to be a CGT liability when you sell the land, I think.  I don't believe that there is an exemption from CGT just because the land is being sold for housing, but I may be wrong - tax law is something I still find as confusing as hell!

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ProDave    660
2 hours ago, MikeR said:

To answer some of the questions raised:

 

ProDave - unfortunately I don't have the available means to put in the road and infrastructure myself to enable them to be sold as serviced plots. In addition to this as the land is also my primary residence any sub dividing of it would also leave me open to capital gains tax.

 

But however you sell bits of your primary residence you will be liable for CGT how can you avoid that?  Selling one plot per year for the next 9 years would allow you to use each years CGT allowance to minimise tax liability. Sell one plot first (the easiest one nearest the road?) and use the proceeds from that to put the road in and service the other plots?

 

The Graven hill scheme as I understand it, they became obsessed with not adding the VAT onto the cost of servicing the plots. The way round it that they devised was this "golden brick" thing as a way of getting the service costs to the buyer VAT free.  But for all the complications and restrictions it places on the developer, I would just rather buy a bare plot, and accept that I might have paid some VAT on some of the cots of servicing it.

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MikeR    4

At the moment I'm hoping to form the 9 people (8 + me) into a self-build co-operative which will become a single legal entity and will register itself for VAT and so long as the land is sold to the co-operative in one go (and not piecemeal to the individuals) then I believe that I will overcome the CGT issue as the sale of anyone's primary residence is exempt from CGT. (That bit of advice cost me £350 + vat from a chartered accountant!).  

The current plan is for the co-operative itself to install the road and services to each plot and only then for the site to be subdivided into 9 plots (by the picking of lots) with each plot registered separately in an individual's name with the land registry.

Lots of plans and I hope that it all goes smoothly (which is unlikely) so watch this space!

I'll take a look at the Graven Hill site and see if I can find out any more information etc so many thanks for that tip.

 

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JSHarris    869

I'll be interested to see if the CGT can be avoided, as I'm not sure that the advice you've had is right.  As soon as you gained planning permission for the plots of land, their value increased significantly, and on their sale the increase in value of all the plots except the one you keep as your principal residence should become liable for CGT, however you dispose of it.  I can't see how forming a limited company avoids this, and it may well create further problems with regard to the self builds.  I know that self-builders have looked at the limited company approach as a way of reducing the VAT reclaim cash flow problem, but the disadvantages seem to outweigh the advantages, I believe, which is why the general advice is not to do it unless you absolutely have to.

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Ferdinand    413

@MikeR

 

If you reply with an @ sign and choose the name from the menu the person gets a notification.

 

I think you have really tight timescales and finances on this one, and that you may be building in some difficulties by the way you are organising it eg A conflict of interest between you as seller and as a member of the self-build group.

 

The asset you are putting in seems to me to have a value equivalent to something like 20-35% of the value of the plots you will sell and 10-15% of the GDV, which to me does not feel like It leaves you with a generous margin to absorb the cost of risks and contingency and S106 and all the site works which will come off your share. 

 

If you throw in the difficulties of community organising a group of well-off articulate people who can afford these plots and will be doing a once in a lifetime project and have skilled advisers and no ideological common bond, then you will be living in *very* interesting times.

 

Ferdinand

 

 

Edited by Ferdinand

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