Persimmon PLC, reportedly the largest British home builder, is writing down the value of its land holdings by 600 million pounds, in addition to a writedown of 40 million pounds June 30. Based on the 76,159 lots they reported holding at that time, this is a drop of about 7800 pounds per lot. The mid-year report(pdf) also implied the total value of their land holdings was about 2.7 billion pounds, so this latest writedown might be about 22% of the land value.
A 5500 sq ft lot in Flushing, offered for $3.49 million, pays taxes of only $12,000/year according to this ad. That’s about 1/3 of 1%, if the value is at the asking price. Typical residential properties pay about 3 to 6 times this percentage of value, I think. The asking price works out to $634/sq ft., which seems like a lot for a site in an outer boro, altho I’m not very familiar with NYC land prices.
Tags: Flushing, Queens, undertaxed
A 3.5 acre parcel, adjacent to their campus, was purchased for $1,995,000 by a local hospital. They claim it was actualy worth only half that, but they overpaid because they really really wanted it, and therefore they sought a reduced assessment. An appeals court now agrees that sales price is the best indicator of land value.
What would have happened had the hospital refused to pay more than what they claim is the “actual” value of $1 million? There’s a lot we don’t know, including whether the seller was holding for investment or future use, and whether the seller had any particular need for cash. We do know that the buyer used an agent, to keep their identity secret. It seems that the hospital wanted to buy the land to hold it for possible future use. If they’ll now have to pay significant taxes, say 1% to 2% of value, that’d be no more than $40,000/year, pretty nominal relative to the size of the enterprise. (According to their 2006 financial statement, the hospital organization paid their chief executive about $1.3 million, not including expense accounts). And it could be reduced by leasing the land for agriculture or other purposes.
source: Chronical-Telegram, CHP Loses Fight Over Land Value, August 26 2008
Tags: Elyria, holding vacant land
Several large buildable parcels around Bakersfield have sold for less than 25% of previous purchase price, according to the Bakersfield Californian
Ennis Homes Inc., a regional builder based in Porterville, sold two southwest parcels for less than $1.5 million, county records show. Ennis bought the land in 2005 in a pair of transactions totaling more than $8.2 million.
KB Home, a national builder headquartered in Los Angeles, sold a northeast parcel for $765,000, records show. The company bought the land for more than $3.3 million in 2005.
It’s at least the third such transaction locally since the market slipped.
Late last year, a subsidiary of San Diego-based Corky McMillin Cos. made a similar sale to local developer Tom Carosella when selling for $2 million a southwest tract McMillin had bought for $9.6 million.
Source: Land sells for a song Gretchen WennerThe Bakersfield Californian Released : Wednesday, July 23, 2008 4:00 AM (via /www.calibre.com/)
Apparently this is just in and around the city of Lakeland, FL. Prices range from $2,000 (for a parcel at an ATV park) to $23.1 million for 30.8 acres for commercial development. For only $12,500 you can get “1.25 acres of high and dry land. Presently inaccessible. Possible great future investment.” But many of the parcels, even below $20,000, might possibly be suitable for residential construction.
If local officials are wondering why valuable parcels remain vacant, they might consider that the real estate taxes on such properties are negligible. The $23.1 million parcel pays taxes of just $3526. The next three most expensive ask $19.8 million ($403 taxes), $17.88 million ($2780), and $13 million ($76). If the owner’s finances are reasonably stable, there’s not much incentive to sell, is there?
Tags: florida, lakeland, taxes too low, vacant land