Land Pooling Agreement...


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We have seen a significant increase in the number of our clients who need advice related to the sale of land for development. The degree of complexity associated with these transactions varies widely. At the end of the spectrum, there is the landowner who sells a small field to a neighbour who wants to build a house. At the other end of the spectrum is a large-scale urban expansion plan involving several landowners. Many rural pool trusts seem to be working well and the government seems to have clung to the benefits of this approach. The White Paper “Housing2018” raised hopes that local authorities and other public institutions could house their own land in rural pools in order to encourage dissemination by other landowners. The government ignored some excellent examples at home and based on a case study conducted in Germany. The German example involved 80 different landowners. Maybe the fact is that if it can work with 80 owners, that`s how easy it could be, with, say, four. The most common method used to enable cooperation is a cooperation agreement.

Here, the multiple owners agree in advance on the distribution of the proceeds of the sale of the land between them and the agreement obliges everyone to act in concert in the common good. This means that all ransom ideas are set aside and a single harmonious voice can be presented to the planning authority. Since the CGT is charged for the granting of options on land, since this is indeed the sale of land interest, the values should be kept low, so that options should be granted as early as possible in the process before the country grows. The problem arises when a certain landowner is sold. This landowner will only want to tax their share of the proceeds by deducting payments to other landowners under the agreement. However, no deduction is available, although other landowners are taxed on their share of the proceeds. The same problem will arise when other landowners come to sell their land, the CGT being calculated on the gross product and not on their personal share of the product. They have already received money and taxes on land that does not belong to them, so in the end with a double fee to the CGT. The fact is that nothing is easy when it comes to development land. I have on my desk the order to evaluate 105 hectares, where there are three landowners in a pool trust, a clearing contract, an overage agreement and all under option for a farmer.

Overall, this should facilitate a decent price of land for all three when the first stone is laid, but I try to write an evaluation report that is understandable to the reader. I am in danger of drowning under a pile of documents, but I appreciate the human interaction with lawyers, a patient farmer and landowners. It is the latter who provide the animated drama, because it is their unique opportunity to do it properly, so everything is important. Government role and responsibility: On the way to landowners under LPS: – allow registration for LPOC without payment of registration fees.