Development Ownership Structure

[duce]

Hi there,

I have a question that eludes me.

Is there a correct ownership structure that should be used when developing your PPOR into multiply lots. At present our PPOR is in my sole name only and we wish to develop the land firstly into 2 lots, one being a R30 site and the other would be a R20 single lot.

As the R30 site is quite large it will allow for around 22 strata titled lots. We are looking for suggestions as to when and how to change the ownership structure to ensure that we can establish the most tax effective structure to support our goal.

Do we apply for the D/A in my name or do we apply in our DFT name or in our Trustee company name. Or other?

Any advice or guidance would be appreciated so as we do not make a costly mistake in the first stage of this project.

Cheers::

 

[Terry_w]

Is there a correct ownership structure that should be used when developing your PPOR into multiply lots.

No such thing as a 'correct' structure. You have to work through all the issues and make informed decisions. What is good for me may not be good for you for example.

But there are various strategies you can use, regardless of ownership structure and you really need both legal and tax advice before doing anything.

Do a search and read the thousands of posts (or some of them) about 'structure'.

 

[duce]

Hi Terry_w

But there are various strategies you can use, regardless of ownership structure and you really need both legal and tax advice before doing anything.

I have been reading many posts but the information seems to be confusing at the very least as to the outcome.

Would it be best to sell the property to our DFT at market value based upon a submitted D/A (submitted by the DFT with a letter of consent to act by me the owner).

My understanding is that this sale would retain my position in respect to CGT (tax free status) but would mean that Stamp duty is now payable by the DFT upon the contract being finalised between the parties.

But is this the correct or best entity to use for the new structuring towards a development to minimise the tax payable overall??.

Cheers

 

[Blacky]

But is this the correct or best entity to use for the new structuring towards a development to minimise the tax payable overall??.

you really need both legal and tax advice before doing anything.

Terry has answered the question already.

Blacky

 

[Terry_w]

But is this the correct or best entity to use for the new structuring towards a development to minimise the tax payable overall??.

See Blacky's post above!

 

[Paul@PFI]

Hi Terry_w



I have been reading many posts but the information seems to be confusing at the very least as to the outcome.

Would it be best to sell the property to our DFT at market value based upon a submitted D/A (submitted by the DFT with a letter of consent to act by me the owner).

My understanding is that this sale would retain my position in respect to CGT (tax free status) but would mean that Stamp duty is now payable by the DFT upon the contract being finalised between the parties.

But is this the correct or best entity to use for the new structuring towards a development to minimise the tax payable overall??.

Cheers

"Retain" main residence exemption...Not really. It ends the day you move out. Before you demo.

1. Have you considered GST in that sale? The DT isn't buying a home, or a residence. Its buying trading stock (land). Reason why tax advice is needed. And legal advice. The cashflow issues and funding of the GST would have to be explored if its applicable.
2. And the duty
3. But it may trigger a higher cost base for the land for the dev subject to ordinary income tax (not CGT)
4. The CGT exemption is triggered. And a higher cost base.
5. What state ? What are the land tax rules ?? In NSW a DT has a $0 land tax threshold. Extra cost is up to $6k extra for a DT to own land.