Using your GDO rights can make you tax-free money.

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There are endless TV programmes about how to make money out of property. All the people involved have one thing in common – they are all doing something to their property to make it more valuable than when they bought it. Improvements lead to an increased sale price.

Nationwide estimate that adding third or fourth bedroom pushes up the value of a house by these percentages:

3rd bedroom 4th bedroom UK generally 10.8% 9.00% London 13.1% 9.10% East Midlands 11.9% 11.50% North West 12.2% 10.00%

Read the Nationwide report by clicking here.

Other extensions will increase the size of your living area or, for example, turn your kitchen into a large kitchen-diner, and those works would similarly add to the overall value of the house because the overall floor area has been increased.

An extra bedroom and bathroom in the loft may put an extra £50,000 on the sale price of your house, but it may only cost you £20,000. if you do this as an improvement to your home (not as a developer) you would pay no tax on the £30,000 profit because it is part of the sale price and we don’t pay tax on the profit from selling our ‘principal private residence’ (to use the tax definition).

If you do a loft conversion, you won’t be wasting money. You will have a more valuable house. A loft conversion creates extra floor space and may give you an extra bedroom and bathroom.

See how this can dramatically affect your house’s value.

If you do the loft conversion this year and sell in 10 years time, the cost is a one-off – it never changes. But (hopefully) the housing market will go up over 10 years, taking the value of your house with it. So what would be a £30,000 profit today – see the previous example – may grow to £40,000, £50,000 …. and so on. Can you think of a better way to invest money for a future tax-free return?