Mother-in-law's property is being converted into building land.

Hello everyone,

my mother-in-law has a fairly large plot of land in an area that is becoming a new development area. We would like to build there now, but I do not quite understand the distribution of the costs.

It is such that she was offered 210,000 euros for the plot by the original development company. However, this company is now insolvent and the development is being carried out by another company.

My mother-in-law recently received information that the development costs of the originally stated 85 euros/m2 cannot be maintained and will be higher.

Now I have some questions:

If we want to build on this plot, we thought we would pay my mother-in-law the amount she would have received from the development company. But I do not quite understand how the whole thing is calculated.

How is the amount that the former landowners receive from the development company calculated? Do they take the standard land value times the plot size and subtract the expected development costs and pay the difference to the original owners?

Hello,

my mother-in-law has a fairly large plot of land in an area that is becoming a new development zone. Now we would like to build there, but I don't quite understand the distribution of costs ... It is so that she was offered 210,000 euros for the plot by the original development company. However, this company is now insolvent and the development is being carried out by another company.

How is the amount calculated that the old landowners receive from the development company? Do they take the standard land value times the plot size and subtract the expected development costs and pay the difference to the original owners?

The standard land value, as the name suggests, is a guideline value. In recent years, municipalities and cities have largely adhered to this value according to Boris. However, it always depends on the location of the plot, so that municipalities/cities have always demanded higher prices per square meter for "prime pieces".

Private development companies apply the value per square meter that they consider appropriate; the standard land value "can", but "does not have to" automatically be identical to this value. One thing is certain in the case of your mother-in-law, that the TEUR 210 without development costs is understood.

From my point of view, there are 3 possibilities:

1. You pay your mother-in-law the value of her plot according to the standard land value
2. You talk to the new development company and find out how much they want to pay per square meter and offer this amount to your mother-in-law
3. You negotiate a familial price with your mother-in-law, independent of the standard land value and development company

Best regards from the Rhineland

Hello gimli,

before I answer your question, I have a few follow-up questions:

1. You talk about a fairly large plot of land. Do you want to take over this plot alone, or will several (partial) building plots be created from this plot of your mother-in-law's land?
2. Was the plot already (partially) developed before, so that it could have been built on?
3. Has the plot been incorporated into a larger area that was to be reallocated (land readjustment)?

Valuation in the development phase of building plots is also not a trivial matter, but within the family you should be able to pragmatically approach a value.

Regarding Bauexperte's suggestions: The purchase price based on the standard land value generally will not work, since the standard land value usually indicates either farmland or fully developed building land. However, your mother-in-law very likely negotiated with the original developer about land with building expectations; this status is not represented in the BOdenRichtwertInformationsSystem (short: BORIS), and BORIS only shows the values determined by the appraisal committee at the beginning of the year – BORIS is thus usually updated only once a year (around Jan./Feb.) AND only shows the purchase price developments from the previous year.

The other two suggestions work, although I can only advise involving a clever tax consultant, since costs for purchase contracts (!) are linked to the values transferred, and such transfers within the family can also be excellently used for tax purposes.

More info/contact gladly via PM, because the topic is – if you are really interested – so extensive and detailed, for which a forum is definitely the wrong platform.

Best regards
Dirk Grafe