I can't recall if this has been discussed before, but I'll put it out there anyway....
With all the recent talk about home ownership affordability (in which I dispute a problem exists, but that's a different topic) a thought crossed my mind today while daydreaming.
Would I be able to buy a HOUSE AND LAND in fee simple, then sell the HOUSE ONLY as a leasehold for say 50years?
Just pulling figures out of the air here...
Say I buy a house/land for $500,000, and the "house" is worth $200,000....
I could sell that house as leasehold for $300,000 (or any other figure really) on a lease for 50 years (or 99 years) and retain ownership of the land, and generate a rental income on the land from the house owner.
Surely this would assist in the elimination of any "housing affordability crisis" that is currently being spoken about.
Now, what advantages would I as the investor gain?
I retain ownership of the land, thus an appreciating asset
The cost of the land is "subsidised" by virtue of the Lessee buying the house
I generate a rental income on the land
If the lessee doesn't pay what he needs to pay then I can resume the house (pursuant to the lease agreement of course)
The disadvantages?
I have to pay stamp duty on the purchase which is unrecoverable
Now, I haven't investigated this, but I don't see why this wouldn't be do-able.
Would love to have a discussion about the pro's and con's, tax implications, and any feedback from accountants and lawyers would be most welcome.
With all the recent talk about home ownership affordability (in which I dispute a problem exists, but that's a different topic) a thought crossed my mind today while daydreaming.
Would I be able to buy a HOUSE AND LAND in fee simple, then sell the HOUSE ONLY as a leasehold for say 50years?
Just pulling figures out of the air here...
Say I buy a house/land for $500,000, and the "house" is worth $200,000....
I could sell that house as leasehold for $300,000 (or any other figure really) on a lease for 50 years (or 99 years) and retain ownership of the land, and generate a rental income on the land from the house owner.
Surely this would assist in the elimination of any "housing affordability crisis" that is currently being spoken about.
Now, what advantages would I as the investor gain?
I retain ownership of the land, thus an appreciating asset
The cost of the land is "subsidised" by virtue of the Lessee buying the house
I generate a rental income on the land
If the lessee doesn't pay what he needs to pay then I can resume the house (pursuant to the lease agreement of course)
The disadvantages?
I have to pay stamp duty on the purchase which is unrecoverable
Now, I haven't investigated this, but I don't see why this wouldn't be do-able.
Would love to have a discussion about the pro's and con's, tax implications, and any feedback from accountants and lawyers would be most welcome.