A client owns a Grade 2 listed building with significant dilapidations. No statutory notices have been received yet, but a surveyor estimates the conservation deficit on the property is £2m (£1m property value against £3m dilaps estimate). Therefore, the property has a negative value. There will be no heritage exemption. Enabling development has not been applied for.
Does anyone have experience of claiming this ‘liability’ for an estate? The IHT405 doesn’t seem to cover it.
I suppose to me the question is even if technically it has a conservation deficit and hence a negative value, would someone with deep pockets and a fondness for a nice house buy it? And if so for what price (based on comparables)? People take on lovely, run down, old houses knowing they are money pits. And what would the property be worth if £3m was spent on it? Did the surveyor comment on that?
To my uneducated (in these matters) mind, the price someone would be prepared to pay would be the value for IHT. Is there a liability if the council has not yet forced the repairs and the market hasn’t been tested (although I appreciate no sale could exchange/ complete until after Probate). Presumably the estate will want to sell? Can the estate afford to apply for enabling development? Presumably this may allow a better price to be achieved but with a corresponding increase in IHT.
Sorry no firm answer. I would be interested to hear the outcome.
Hi Sara, good to hear from you and thank you for your comments. Assume this property is well underwater and a wealthy romantic would not buy it. The deficit is too significant.
Thank you also for your wishes of luck!
Philip