On this page
- What is a sale subject to planning?
- How is the price agreed before planning exists?
- What counts as a satisfactory planning permission?
- Who applies for planning, and who pays for it?
- How long does a sale subject to planning usually take?
- What happens if the council refuses permission?
- What are you agreeing to while the contract runs?
- Is it better than an outright sale or an option?
- Step by step
- Questions
Who this suits
- Owners of a clear garden plot who want a price informed by planning
- Homeowners who can wait for a council decision before being paid
- Sellers who want the buyer committed from exchange, not just holding a right to buy
- Owners who would rather not fund or manage a planning application themselves
- Anyone who wants to see the proposed scheme before any land changes hands
What is a sale subject to planning?
A sale subject to planning is a contract to sell your garden plot that only becomes unconditional once planning permission is granted. Both sides sign and exchange contracts at the start, with the price, or the formula for working it out, already fixed. Completion, and the money, follow the permission.
Until then, nothing changes on the ground. The plot stays in your name and on your title, and you carry on using it as garden. We prepare and submit the planning application, normally at our cost, and if the council refuses and the contract ends, you keep your land.
It sits between our other two selling routes. An outright sale pays sooner, at a price that allows for planning risk. An option gives us a right to buy rather than an obligation. A conditional contract binds both of us from exchange, giving you more certainty than an option and a price informed by planning, in return for waiting on the council.
How is the price agreed before planning exists?
The price is settled before exchange, in one of two ways. A fixed price names a single figure payable on completion. A price formula links the figure to the permission actually granted, so it can reflect, for example, whether the council allows one home or two, or a larger or smaller floor area.
Fixed prices suit plots where the likely scheme is clear from the start. Formulas suit plots where the outcome could reasonably vary, because nobody has to guess. Many formulas include a minimum price, so you know the lowest figure the sale could complete at, and where a valuation is involved the contract says how the valuer is chosen.
Any deductions, such as recovering part of our planning costs, are written into heads of terms before you sign. You see the whole calculation at the start, not at completion.
What counts as a satisfactory planning permission?
The contract doesn’t complete on any permission at all. It defines a satisfactory one, and that definition does more than any other clause to decide whether your sale happens. It usually covers:
- The scheme: the number and type of homes the permission must allow, sometimes with a minimum size.
- Conditions: which planning conditions would be unacceptable, for example one that makes the build impractical.
- Planning obligations: limits on any section 106 agreement or contributions the council asks for, and on the Community Infrastructure Levy where the council charges it.
- The challenge period: completion usually waits until the time for any legal challenge to the permission has passed.
- Who decides: objective tests rather than our opinion, so a sound permission can’t simply be called unsatisfactory.
Who applies for planning, and who pays for it?
We do. We commission the surveys, prepare the drawings and statements, seek pre-application advice where the council offers it, and submit the application. We normally fund all of this, and any recovery of those costs is agreed in heads of terms before you sign, for example as a deduction from the price on completion.
You don’t have to transfer the land before an application is made. The Planning Portal confirms that an applicant doesn’t need to own the land, but the owner must be told about the application. So you will receive formal notice, even though you already know it is coming.
The scheme is designed around the council’s Local Plan and the NPPF, and follows the council’s design guide or supplementary planning document. The contract normally asks you to support the application, or at least not to object, and to allow access for surveys. In return you should expect to see the drawings before they go in and to hear how the council responds.
In Wales The scheme is designed around the council’s Local Development Plan (LDP) and PPW, and follows the council’s supplementary planning guidance and Technical Advice Note 12 on design. The contract normally asks you to support the application, or at least not to object, and to allow access for surveys. In return you should expect to see the drawings before they go in and to hear how the council responds.
How long does a sale subject to planning usually take?
Think in stages. Agreeing terms and exchanging contracts often takes a few months. Preparing the application usually takes a few months more, depending on which surveys are needed, since some ecology work can only be done at certain times of year, and on whether pre-application advice is sought.
Once the application is valid, the Planning Portal says most are decided within eight weeks. Councils can ask the applicant to agree more time, and garden schemes with objections or awkward access often run beyond that. If an appeal is needed, add months rather than weeks.
All of this sits inside a long-stop date: the last date by which a satisfactory permission must be granted. It is agreed at the start and should leave room for one application and, where sensible, a resubmission or appeal. Completion then follows within an agreed period once the condition is met.
What happens if the council refuses permission?
If permission is refused, you keep your land. Nothing has been transferred, and the plot is still on your title.
A refusal doesn’t always end the contract at once. Depending on what was agreed, we may revise the design and reapply, or appeal to an independent inspector, provided the long-stop date hasn’t passed. If no satisfactory permission arrives by then, the contract ends and our entry on your title is removed.
Our planning costs are normally ours to carry. Where any recovery has been agreed, heads of terms say exactly when and how it applies, so read that clause before you sign and ask your solicitor to walk you through it.
What are you agreeing to while the contract runs?
Exchanging a conditional contract commits you to sell if the condition is met, so a few things are fixed for as long as it runs.
- You can’t sell or promise the plot to anyone else, and our contract is protected by a notice on your title at HM Land Registry.
- You keep using the garden as normal, but shouldn’t build on it, fell trees or grant new rights over it without agreement.
- Surveyors and ecologists will need occasional access, arranged with you in advance.
- If your house is mortgaged, your lender may need to agree to the contract and must release the plot at completion.
- If you decide to sell your house meanwhile, tell us early. Your buyer’s solicitor will see the contract on the title, and the two sales need arranging together.
Is it better than an outright sale or an option?
It depends on the plot and on what you need from the sale. A sale subject to planning tends to suit a single garden plot where a realistic scheme is visible from the start, where you can wait for a decision, and where both sides want certainty once permission is granted.
An outright sale is the better fit if you need the money soon or would rather not wait on a council at all. An option usually works better where the outcome is less certain or the timescale longer, for example where a neighbour’s garden may need to be added, because it gives us time without binding us to buy. After the appraisal, we’ll say which route we’d recommend and why.
Step by step
Free plot appraisal
We check your title, access, planning history and local policy from our desk, then talk it through with you. If a new home looks realistic, we visit the garden and tell you which route we think suits it best.
Heads of terms
We set out the price or price formula, what counts as satisfactory permission, the long-stop date, how any planning costs are treated and who pays which fees. You see all of it before instructing a solicitor.
Exchange of conditional contracts
Both solicitors agree the contract and the plan of the plot. On exchange, both sides are bound, subject to the planning condition, and our contract is noted on your title so the plot can’t be sold elsewhere.
Planning application
We commission the surveys, prepare the drawings, seek pre-application advice where useful and submit the application, normally at our cost. You see the plans before they go in, and the council makes the decision.
Completion, or you keep your land
Once a satisfactory permission is granted and any challenge period has passed, the sale completes within the agreed time and the plot gets its own title. If permission is refused and the contract ends, the land stays yours.
Things to weigh up
- You wait for a planning decision, and possibly an appeal, before you are paid.
- Once contracts are exchanged you are committed to sell if a satisfactory permission is granted.
- The plot can’t be sold to anyone else while the contract runs, even if another offer comes along.
- The definition of satisfactory permission and the long-stop date decide how certain the sale really is; read both closely.
- Capital Gains Tax timing on a conditional sale can differ from an ordinary sale; take advice from a tax adviser.
Questions about subject to planning
Is ‘subject to planning’ the same as ‘subject to contract’?
No. Subject to contract means nobody is bound yet: the terms are agreed in principle and either side can still walk away. Subject to planning means contracts have been exchanged and both sides are bound, but completion only happens if a satisfactory permission is granted. Heads of terms are subject to contract; the conditional contract that follows is not.
Can I pull out after exchanging contracts?
Generally not, because exchange is what makes the contract binding on both sides. The contract will say when it can end: usually if no satisfactory permission is granted by the long-stop date, or if either side breaks its terms. That is why the time to raise doubts is at heads of terms, before your solicitor exchanges.
Can you walk away once planning is granted?
Not if the permission meets the contract’s definition of satisfactory, which is why that definition should use objective tests. If a deal does end after permission is granted, the permission generally stays with the land rather than with whoever applied, so it would still relate to your plot unless the permission itself says otherwise.
Do I receive any money when contracts are exchanged?
The price is usually paid on completion, after a satisfactory permission is granted. Whether anything is paid on exchange, such as a deposit, depends on the deal and is set out in heads of terms. Ask about it at the start rather than assuming either way, because it affects how you plan for the months in between.
Will I see the plans before they are submitted?
Yes. We share the drawings with you before the application goes in, and we’ll talk through any changes the council asks for. You can raise concerns about how the new home relates to your house, such as windows or the position of the boundary, and the contract can fix some of those points in advance.
What if the council approves a smaller scheme than planned?
That depends on the contract. If the smaller permission still meets the definition of satisfactory, the sale goes ahead, at a price adjusted by the formula where there is one. If it falls short, the contract may allow us to try again before the long-stop date, or it may end, in which case you keep your land.
How does Capital Gains Tax work on a conditional sale?
The general rule is that a disposal under a conditional contract is treated as made when the condition is satisfied, not on exchange. Private Residence Relief can cover part of a garden sold while you still own and live in the house, but moving out before completion could affect that. Take advice from a tax adviser before you exchange.
Who pays Stamp Duty Land Tax or Land Transaction Tax on a sale subject to planning?
The buyer of land pays it: Stamp Duty Land Tax in England, or Land Transaction Tax in Wales. On a sale to us, any amount due falls to us, and it becomes payable around completion rather than on exchange. What may concern you as the seller is Capital Gains Tax, which depends on your circumstances and timing; take advice from a tax adviser.