26 Oct Buying real estate at golden brick can be great value – but what is it?
If you’re thinking of investing in property, you may have heard of the term ‘golden brick’. But why is it important and what does it mean for you?
First of all, what is Golden Brick?
Golden Brick is a term that the building industry uses for the point at which a building becomes residential. Before you’ve done the foundations, before you’ve done all the surfaces, the bit of land could be residential or it could be commercial. You could be building houses or you could be building offices.
The VAT man, HMRC, decided that once you have built the foundations, effectively you’ve decided what the building’s going to be. And the VAT treatment – which is different for residential as against commercial – fixes and hones in, so residential, which means you get 0 VAT on a residential building, kicks in at the point at which all the foundations are done.
So effectively it’s the first brick laid once you’ve done all the foundations, and that’s why they call it the Golden Brick.
Now why is Golden Brick interesting to you?
We build homes and we’re trying to build high quality, great design, great for the environment and great value.
So how do we get great value? Effectively by saving you as much money as we possibly can. And we save you money by bringing you in early.
So we don’t build the entire thing and then say here you go. We build as little as possible for you to build out some of the stuff yourself. To find and source materials that are cheaper. Maybe find end of line discounts on kitchens or on bathrooms, maybe even find second hand flooring, reclaimed flooring, etc.
What we do therefore is we want to sell you your home as early in the process as possible. The earliest we can possibly sell it to you is at Golden Brick, for the tax reasons.
And that’s why we sell you the plot at Golden Brick, and then on top of that, you effectively pay us to build the house or in our case the shell, and then you’re free to either ask us to build out the rest, fit it out to your specification, or you do that yourself or with your own builder, or with your own architect.
And the benefit to you is effectively you’re paying stamp duty only on the land, and not on the house. And so that means there’s significant savings, 10’s of 1000’s of pounds, in some cases up to £100,000, because the stamp duty goes up and up and up as you pay more. But of course the land price is much lower than the finished house price.
So that’s one of the ways we can save you significant amounts of money.
– Gus Zogolovitch