Land Taxes That Could Bankrupt You If Your Not Aware Of Them Do you know there are so many hidden Charges and taxes that you must pay when buying a land that could bankrupt you easily if your not careful? These taxes hide in plain sight and it is until you want to perfect your papers it will rear its ugly head. I have compiled a list of 4 Problematic fees that your not aware of and the earlier you start taking cognizance of it, the better: 1. Everybody wants to buy a land with a C of O but do you know that every owner of a C of O must pay a yearly fee per annum to the government for occupying that land. This fee is know as a GROUND RENT and it has a certain fee that holder must pay. For every year the person defaults in paying that GROUND RENT , the person incurs a penalty. But because of our very lax tax system, the holders of that C of O rarely pay that amount and in most situation, they are totally ignorant of the fees they are to pay. The problem now arises when a new buyer is interested in buying that Land with a C of O. If you dont do a comprehensive check on that C of O, you will never know that your about to INHERIT SOMEONE ELSES DEBTS at once. The Land registry Tax department will compute the Ground rent from inception that the C of O was obtained, compute the penalties , value it at todays inflationary rates and give it to you before you can process your Governors Consent. That is why the cost of Governors consent is so high in some peoples case because they dont know that they are carrying the load and problems of other peoples taxes as their own burden. The best way to avoid this scenario is to make sure the Lawyer doing the search for you carries out a comprehensive check at the tax registry to know exactly how much the holder of the C of O is owing the Government. Once you have an idea of the costs owed, you can now use that as a veritable bargaining tool to deduct money from the asking price of the property. I have used this method so many times for my clients to obtain a reduced fee for the Land transaction. Whenever i hit the owner of the C of O with his Ground Rent Charges, he is always eager to sell the land quickly at a reduced price so as not to continue holding on to a burden that could ruin him at any given time. Sometimes Sellers are willing to share the Ground Rent so as to make it equitable and both parties suffer the penalty. Make sure you know the Ground Rent of any property that has a C of O before hand , lest you suffer the consequences of it.
Posted on: Fri, 20 Dec 2013 20:33:20 +0000
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