Gavin Birchall , Tax Director talks to Adviser about some of the hot topics being discussed in our region regarding land development LAND AND LIABILITIES Q. What trends are you seeing currently in relation to
Q. Why do you think there is an increasing trend towards landowner collaborations? A: A greater area of land can sustain large scale developments which can produce greater financial returns for landowners and developers alike. There are also substantial housing needs which local councils have to formulate plans for, so large scale sites are attractive to local councils in helping them fulfil this need. There are also political pressures for local councils to create new garden cities which rely on large blocks of land being available for any such development scheme. Q. Why do you think is it such a topical issue in East Anglia? A: Colchester Borough Council are currently formulating their Local Plan for 2017 to 2032 which will set out their strategy and plans for fulfilling local housing demand. Consequently, there is a timing issue in play with landowners needing to manoeuvre themselves in a good position for their site to be allocated as part of the Local Plan. In terms of the rest of East Anglia, the devolution agreement between Norfolk, Suffolk and Cambridgeshire devolves key powers over development and infrastructure to a new regional authority which is tasked with the delivery of 69,000 new homes by 2021.
landowners selling land? A: Locally, we are seeing neighbouring landowners “pooling” their land and collaborating together to sell their land as a collective unit to property developers. In many cases, the collaboration of landowners will appoint a land promoter to promote the land through the planning process ready for onward sales of the land to developers. The landowners will usually enter into a Collaboration Agreement to set out the way in which they will co-operate together to achieve their objective and the way in which they split any sale proceeds. Q. Can you explain a bit more about what the Collaboration Agreement is? A: Under collaboration arrangements, landowners agree to split the proceeds amongst themselves based on the acreage of land or land value which they contribute towards the overall land pool. Where land is sold in tranches (rather than as a single whole), the owner whose land is sold last, still receives a percentage of the proceeds for the land which is sold initially.
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