Building a house on someone elses land

Discussion in 'Innovative Techniques' started by neK, 13th Jul, 2010.

  1. neK

    neK Member

    22nd Dec, 2009
    Sydney, NSW
    My inlaws have a piece of land that currently has two houses, one house was built in the 90's (which they are currently living in - located at the back of the block), one is a really old house that is falling apart and barely livable (front of the block).

    For the last few years, they have been bugging us to knock down the house that is falling apart and build a new one on it.

    After years of saying no, im starting to think if it might work for us as an investment, but there are few things that stand in our way.

    Issue 1:
    Its currently one title. I could ask them to subdivide it and sell it to us, however this would then cause the following problems:
    • They are in receipt of centrelink, so currently this property is exempt from the assets test as its their PPR.
    • Subdividing it would result in them having a large cash asset that may affect their pension.

    Does anyone know how the market value of the land is calculated once subdivided?

    Issue 2:
    Say they dont subdivide, I believe I will encounter the following issues:
    • The banks wont lend me or my wife any money to build on their land because we physically have no claim to asset.
    • I cannot build a dual occupancy as that would mean there are 3 buildings on the title.
    Are these points correct?

    Issue 3:
    Can you even build a duplex on a piece of land that has been subdivided? The land will be the front part (not the back part).

    Issue 4:
    Say if 4 is possible, can you even subdivide it even further ??? ie Torrens title duplex.
  2. landlubber

    landlubber Banned

    28th Sep, 2002
    Issue 1. IF the problem is SIMPLY their pension, they could sub-divide (STCA) and give you the land ( as a gift i.e. free). Of course, this gets into the family & heirs & inheritance etc situation.
    Issue 2. If it was me, I would NEVER build on land I didn't own. Certainly the bank won't finance you. You got that right.
    Issue 3 & 4. All this stuff ( and more) is STCA. The forum cannot answer you. You have to go see your local council. Maybe spend some $$ with a town planner if you are serious.
  3. marg4000

    marg4000 Member

    27th Dec, 2006

    Won't work.

    Centrelink counts gifts of over $10K per annum as deprived assets and the value of the gift is taken into account for five years when calculating the pension. In-laws would lose the asset AND also lose part/all of their pension depending on the value.
  4. aaarghhh

    aaarghhh Give us a beer love....

    15th Oct, 2006
    Semper Augustus, Tulipmania
    Just thinking out loud....

    Can u create a leasehold title agreement for the new build/premises?

    Or would a leasehold arrangement have to be created at the original land title creation date.

    Hmmm. just thought there might be stamp duty consequences if changed now.
  5. landlubber

    landlubber Banned

    28th Sep, 2002
    Thanks Marg ... I bow to Marg's higher knowledge. RESPECT:) !!!
    PS Lesson 1 .... Even if you're poor ... the gov't still wants to screw you !!
    Lesson 2..... whatever you do ...don't end up "poor" !!
  6. yadreamin

    yadreamin Member

    20th Oct, 2003
    Mandurah w.a
    How weird, today a 83 year old was telling me how His family had a huge rift and His 39 yr old son committed suicide because of the exact reason you have started this thread.
    One son had a few acres, loved it, said anyone who wanted to build a house /shed to stay in on the land was more than welcome.
    Another family member built a nice place on the property.
    1st son decided to sell off that part of the property[with a nice house] no paperwork was ever done:(:( Marrige had turned for the worse
    house got sold family turned on each other 1 son commits the the ulitmate act
    SADNESS SADNESS SADNESS for life ever after.
    Just do your own thing cos you never know what will happen behind closed doors. Families have been destroyed for less and Yes it can happen to you
    Its sad to see an 83yr man cry:(

    landlubber likes this.