Advice sought: sell vs. lease commercial property

[ChristinaOC]

Dear all,

I am seeking a spot of advice on what my best options would be in relation to a property currently in the name of my deceased father but which has been left to me in a trust. I am located in WA so will require information as it pertains to my locality.

The property is zoned R-80 but approved for office use. Given its near-city location and exposure to a busy road, I have been advised that its potential lies as a commercial property, by way of sale or lease. My questions in relation to these are as follows:

Selling

• Is the commercial property market likely to improve in the next three years, or would it not make much of a difference to sell it now?

• What taxes aside from CGT and stamp duty would be payable on the sale of this property as a commercial entity should it remain under my father's name?
  
• A little bird told me that if the property is transferred to my name and is held so for a minimum of 12 months, CGT will be halved. Is this the case?

Leasing

• Would selling a leased property be a viable option? Would this option fetch me a higher or lower price than if I were to market an unoccupied commercial property? e.g. If the contract with the tenant were only for another two years.
  
• Building insurance - who pays? The owner or the commercial tenant?

And two general questions... I was unable to find much information about the so-called "love and affection" clause - what is it and how might it be relevant to my situation?

Also, there is a mortgage on the property in question. The account for the loan is currently frozen. How long does a major bank typically freeze an account for, if interest is being put on hold while the account is frozen?

That's all I can think of right now... If anyone can assist or provide any other information you feel I should know, that would be much, much appreciated.

Thank you =)

 

[Ausprop]

suggest you get some proper tax advice.

bad time to sell commercial in Perth. the office market is probably at it's lowest it will be for the last 5 and next 5 years. there is a forecast shortage in 2 years time so it may be good to sell then

 

[ChristinaOC]

suggest you get some proper tax advice.

bad time to sell commercial in Perth. the office market is probably at it's lowest it will be for the last 5 and next 5 years. there is a forecast shortage in 2 years time so it may be good to sell then

Thanks for your response =)

According to REIWA, West Perth (where the property in question is located) is set to fall 6.1% across the next year but rise 7.9% in real terms within five years. This would include both residential and commercial, however...

Is there a forecast shortage in two years? Do you recall where you found this information; that's pretty positive news.

 

[Ausprop]

REIWA is forecasting price falls? where did you get that from? got a link?

do a search fro my thread on Gorgon. one of my last posts had a link to an article in last wednesdays West Australian. it;s the same old thing every time round... agents in despair and think the world has ended, banks not lending, doom and gloom,nothing gets built, surprise surprise there is a demand for offies and there is a 2 year lead time

 

[ChristinaOC]

http://reiwa.com.au/res/res-suburb-...SC52516&geogroup_id=2169&geogroup_parent_id=3

That's the url. Latest economic data does show the economy picking up very slightly, as I heard on ABC RN this morning.

 

[Dazz]

I am seeking a spot of advice

I counted a total of 9 or 10 detailed questions there Christina, ranging from detailed tax law, to commercial zonings, to future market predictions, to leasing criteria and tenancy laws.


I would contend that each and every one of those questions, if got wrong, could cost you 100's of thousands of dollars.


Don't stuff up the gift your father left you. Take some professional paid advice and get it right. It will cost you dearly, but nothing compared with if you get it wrong.


Instruct the "little birdie" to stop whispering in your ear.

 

[ChristinaOC]

I counted a total of 9 or 10 detailed questions there Christina, ranging from detailed tax law, to commercial zonings, to future market predictions, to leasing criteria and tenancy laws.


I would contend that each and every one of those questions, if got wrong, could cost you 100's of thousands of dollars.


Don't stuff up the gift your father left you. Take some professional paid advice and get it right. It will cost you dearly, but nothing compared with if you get it wrong.


Instruct the "little birdie" to stop whispering in your ear.

There are already two lawyers and one accountant involved and I'd obtained appraisals of the property from two or three different real estate firms a few months ago. Unfortunately, I'm not terribly trusting of paid legal advice currently, given various developments that had occurred. Some of the most accurate advice/information I've been imparted was free. And it seems that even if advice was paid for and proved incorrect or similar, it would cost even more money to hold them to account with no guarantee of success...

But thanks for your reply

 

[Dazz]

Unfortunately, I'm not terribly trusting of paid legal advice currently, given various developments that had occurred. Some of the most accurate advice/information I've been imparted was free. And it seems that even if advice was paid for and proved incorrect or similar, it would cost even more money to hold them to account with no guarantee of success...

I'm hearing ya. Apparently that is the consequence of the true definition of "professionalism" nowadays.

 

[TheShuffler]

The problem is a lot of people think that 'paid for advice' is more worthwhile than 'free' advice!!!

 

[cu@thetop]

Yeah I noticed that so I started charging $300/hr for advice I previously would give for free. Much better outcome for all concerned