Property Clinic: Should we sell up entirely or get our one-acre site developed?

Q. We live in a 1960s bungalow on an acre site in the outskirts of a village outside Dublin. The house sits in the middle of the site and the garden surrounds it. There is planning permission on the site for four detached two-storey houses, which expires in August 2018. We would like to downsize as the garden is becoming too difficult to manage and the house requires upgrading and repair. Our wish is to stay in the area, but there is nothing being built locally that appeals to us. Our dilemma is whether we should put the entire site up for sale and perhaps come to an arrangement with any potential builder/developer to build us a small, low-maintenance house in a corner of the site, or, alternatively, to stay in situ and sell a site on either side of the existing house, which would enable us to carry out necessary repairs and upgrading while also reducing the size of the garden to be maintained.

A. It is obvious that your current house is simply too large and demanding for your future requirements. To sell or not to sell is a big decision, which, if you get it right, could leave you in a comfortable position. Let’s look at the options.

1 Sell the entire property. This is perhaps the most straightforward route. There is likely to be a good demand for the completed houses on this site, and therefore it is reasonable to conclude that there may equally be strong interest in the site itself, particularly as it has planning permission for four detached houses. You should have the property inspected and professionally valued by an experienced local chartered surveyor. Selling development sites is distinctly different from selling houses, and it is important that your estate agent should have experience of this area.

From the proceeds of a sale you could seek to acquire a smaller, more easily managed property in the locality, which is where you want to remain. Importantly, you can sell your principle primary residence on up to one acre without incurring capital gains tax. It could take some time to market and agree the sale and a further time period of two to three months to complete the contracts. All of this will reduce the time a developer has to “complete substantial works” to the development in order to give effect to the planning permission.

Therefore, it is best that the property is brought to the market as early as possible. If the property does not sell, and assuming that the planning permission has not previously been extended, you can apply to the local authority for an extension for a further five years.

2 Sell the site and keep one house. The positives of this option are that you would get to stay on the same site and to move into a new house. This option could also appeal to a developer as it would reduce the capital outlay tied up in the site purchase.

The downside is that planning permission would have to be sought for a further house in the corner of the site and this would eat into the remaining area for development, which could ultimately mean the site was not large enough for the four houses already covered by planning permission.

You would also need to be assured that the house built for you would be done to a sufficiently high standard, something that would be likely to require independent professional oversight. Any such development could take 12-18 months to complete. The development of the entire site could be phased, so you might need to be prepared to effectively live on a building site for a further period until all works have been completed.

3 Sell sites on either side of the house. For this option, I assume new planning permission would have to be sought, which could take some time and raises the possibility of a third-party objection. In addition, you would be surrounded by two separate building sites, which could cause you considerable disturbance during construction. Finally, you would need to be prepared to lose a fair degree of space and privacy by having neighbours either side. If undertaking refurbishments of the existing house, have these works fully specified and estimated prior to commencement and ensure that they do not require planning permission.

In summary, the first option appears to offer the quickest, simplest solution, in that it does not tie you into an ongoing contractual relationship. However, there are many factors to consider and I would strongly advise you to seek professional assistance as soon as possible.

Gerard O'Toole is a chartered residential agency surveyor and a member of the Society of Chartered Surveyors ireland; scsi.ie