Investing in gold or land: Which is the better choice in 2025?
You’re wanting to make a new investment, but you’re torn. Should you opt for the reliable and safe gold, considering gold prices are soaring to record highs? Or should you invest in land – a finite resource that offers opportunities for development, rental income, or resale at a profit? To help you make the right decision, we breakdown the benefits, risks and tax implications of investing in both gold and land below!
Here’s what you need to know at one glance:
Why invest in gold or land? Both gold and land are tangible assets and they can act as a hedge against inflation. In 2025, with economic uncertainty and fluctuating interest rates, they’re both popular choices for investors.
Gold vs. land: Key differences - Gold is a liquid, globally traded asset that provides a safe-haven during market volatility. Land is a finite resource that can generate income through development or leasing. The value of land depends on the location, regulations and demand, while gold prices fluctuate based on factors like global economic conditions.
What are the benefits of investing in gold? Gold is highly liquid, easy to store, and historically retains its value during financial or geopolitical crises.
What are the benefits of investing in land? Land can appreciate over time, generate passive income through leasing or development, and serve as a hedge against inflation.
Which is easier to sell? Gold is easier to sell as it has a global market and instant liquidity. Land sales can take longer, depending on location, market demand, and regulatory approvals.
Why Invest in gold or land?
Tangible assets like land and gold remain popular choices for investors wanting to preserve or grow their savings, especially in uncertain economic climates. Below, we outline the key benefits of both:
Benefits of investing in gold
- Hedge against inflation: Gold preserves its value over time, especially during periods of inflation, making it a safe haven for investors.
- Liquidity: Gold is easily tradable.
- Tangible asset: Unlike stocks or bonds, gold is a physical asset that has intrinsic value, which can provide stability during economic instability.
- Global demand: Gold is universally recognised and in demand, especially during turbulent geopolitical times. On 28th March 2025, gold prices surged to a record high – $3,074.43 per ounce – as investors flocked to the safe-haven asset amid fears of a global trade war triggered by U.S. President Donald Trump's latest tariffs.
- Diversification: Adding gold to a portfolio helps reduce risk by balancing against other more volatile assets like equities.
Benefits of investing in land
- Long-term appreciation: Land generally increases in value over time, particularly in high-demand areas, providing strong capital gains potential.
- Income generation: Land can be leased for farming, agriculture, or development, offering passive income streams.
- Tangible asset: Like gold, land is a physical, finite resource that holds intrinsic value and cannot be easily devalued by inflation or market fluctuations.
- Development potential: Undeveloped land can be transformed into residential or commercial properties, significantly boosting its value.
- Tax benefits: Landowners may benefit from tax deductions, including property tax exemptions, capital gains tax reductions, and deductions for certain land improvements.
Risks of gold investment
All investments carry some risk, including gold:
- Price volatility: Gold prices fluctuate based on global economic events, central bank policies, and investor sentiment, making short-term gains uncertain.
- Storage & security: Physical gold must be stored securely, often requiring additional costs for safe deposit boxes or insured vaults. Alternatively, gold ETFs and other digital investments come with management fees.
- Inflation impact: While gold retains value over time, it does not generate income like land, making it a less active investment.
Risks of land investment
Investing in land can also come with challenges:
- Market competition & development restrictions: Not all land is suitable for development, and competition for prime locations can drive prices up. Zoning laws and environmental considerations may also limit usage.
- Legal & regulatory issues: Land investment often involves navigating complex regulations, planning permissions, and tax laws, which can vary significantly by region.
- Liquidity concerns: Selling land can be a lengthy process, requiring market demand, legal approvals, and sometimes negotiation with potential buyers.
Gold vs land: What are the key differences?
Understanding the differences between gold and land is crucial when deciding which investment suits your financial goals. Here are some key factors to consider:
Gold is primarily a store of value that does not generate income unless sold. Land can be developed, rented out, or resold for profit, making it an active investment.
Gold prices are influenced by global market sentiment, interest rates, and economic uncertainty, making them susceptible to short-term fluctuations. Land values, on the other hand, depend on location, demand, government policies, and development opportunities.
Maintenance & costs: Land ownership comes with ongoing costs such as property taxes, legal fees, and maintenance, whereas gold requires secure storage but no upkeep.
Where to invest in land in the UK
In the UK, several locations are popular for land investment, driven by factors like urban expansion, infrastructure development, and high demand for housing. London and the South East remain popular due to the high demand for residential and commercial property. However, Manchester has been experiencing significant urban development and the UK’s second-largest city, Birmingham, is becoming a hot spot for land investment because of the HS2 high-speed rail project.
Edinburgh’s focus on tech and financial services, and Glasgow's growing urban regeneration, make both cities attractive for investors. Cities like Leeds, Sheffield, and York have seen economic revitalisation, especially in terms of commercial development. Cities like Cardiff and Swansea are growing hubs for tech and business, while Belfast has a growing property market.
What to consider when investing in gold or land in 2025?
High interest rates & inflation: High interest rates can make land purchases more expensive, while inflation typically boosts gold demand as a store of value. In March 2025, the Bank of England announced it would hold interest rates at 4.5%, after some economic and global trade uncertainty led the Monetary Policy Committee to halt any further rate cuts for now.
Geopolitical uncertainty: Global instability can drive investors toward gold as a safe-haven asset. However, certain land investments, especially in politically stable areas, can also benefit from shifting economic trends.
Climate change: Sustainable land developments are becoming more attractive, while the environmental impact of gold mining is under increasing scrutiny.
Gold or land: Which is easier to sell?
Gold can be quickly bought or sold on global markets, making it a highly liquid asset. Meanwhile, land sales depend on location, market demand, and legal processes, which can take time!
Short-term vs. long-term investment suitability
Short-term: Gold is more liquid and responsive to market shifts, making it ideal for short-term investment strategies. However, it’s also suitable to invest in long-term, as it holds its value.
Long-term: Land appreciates over time and can generate passive income through rentals or development, making it a better long-term asset. In 2025, the increasing focus on sustainable and eco-friendly developments, coupled with housing shortages in many countries, makes land an attractive long-term asset.
Tax considerations for gold and land in 2025
It’s essential to consider how gold and land investments may be affected by tax! Gold's relatively simple tax structure makes it easier for short-term investors, while land ownership requires careful planning around transaction taxes, ongoing liabilities, and potential reliefs on capital gains.
Tax considerations for gold
- Capital Gains Tax: In the UK, any profit made from selling gold, whether it’s physical gold, gold coins, or gold-backed ETFs, is typically subject to Capital Gains Tax if the total gain exceeds the annual exemption threshold. For the 2025 tax year, the annual CGT allowance is £12,300 (this could change based on government policy).
- Value Added Tax: While VAT applies to most goods, gold bars and coins that meet specific criteria (investment-grade gold) are exempt from VAT in the UK, making them a more attractive investment for those looking to avoid additional tax costs.
Tax considerations for land
- Stamp Duty Land Tax: When purchasing land in the UK, buyers are subject to Stamp Duty Land Tax (SDLT), which applies to the purchase price. In 2025, the SDLT rates for land (including residential and commercial) are tiered, with a 0% rate on purchases up to £125,000, a 2% rate for the portion of the purchase price between £125,001 and £250,000, and higher rates for more expensive properties. For non-residential land, the rates start at 2% for land costing over £150,000. There are also higher rates for second homes and additional properties.
- Property Taxes: If you own land, you may be liable for Council Tax if the land is developed and used as a residence, or Business Rates if the land is used for commercial purposes. The land may also incur Landlord Taxes if it's leased or rented out, with rental income subject to income tax.
- Capital Gains Tax on resale: When you sell land, any capital gain made on the increase in land value is subject to Capital Gains Tax (CGT). As of 2025, the annual CGT exemption is £12,300, similar to gold, and any gain above this threshold will be taxed at 18% or 28% depending on whether the land is residential or non-residential. For residential land, the higher 28% rate typically applies. However, if the land is used for farming or agricultural purposes, certain reliefs may apply.
- Inheritance Tax: In the event of the landowner’s death, land can be subject to Inheritance Tax (IHT), particularly if its value exceeds the current IHT threshold of £325,000 (or £650,000 for married couples).
Frequently Asked Questions (FAQs)
Both land and gold offer compelling investment opportunities in 2025, but they serve different financial strategies. Gold provides security and liquidity, while land offers long-term growth and income potential. The right choice depends on your financial goals, risk appetite, and market conditions.
Where can I invest in gold?
You can buy gold from a trusted reseller like GOLD AVENUE. We’re the official online gold reseller of the MKS PAMP GROUP and offer a wide range of investment-graded gold bars, exclusive gold coins and various numanistics.
Where can I store gold?
Many gold dealers, including Gold Avenue, offer allocated storage services, where your gold is stored in a secure, insured vault on your behalf. This is a popular choice as it ensures that your gold is segregated and easily accessible, with high-level security measures in place.
How does land investment generate passive income?
Land investment generates passive income through leasing or renting the land for agricultural use, commercial purposes, or residential development.
Is land a good short-term investment?
Land is generally not considered a good short-term investment due to its illiquidity and the time required to sell or develop it. However, if located in a rapidly growing area or with immediate development potential, it can offer significant returns in a shorter time frame.