Development site structure advise please

[Proprtyhunter]

I have a competitive offer to a development site in regional NSW. The site comprise of 2 titles. Total cost around $800K.

I have just spoken with the town planner and it would be possible to build 16 town houses in the land.

I am going to join with a friend to build this property. We both currently doesn't own any investment properties. So we might get land tax threshold if we buy one each individually.

We are thinking of two options going forward.
1) Get DA approval for 16 townhouses and sell the property together.
2) Bring few more friends at a later stage and build 16 units within the next 4-5 years. Build and hold or sell not sure at this moment.

Appreciate advise on the best structure to buy this property.

 

[Terry_w]

Seek professional advice - from a stranger at a BBQ perferrably.

If you bring in friends later - stamp duty and tax and loan consequences.

Possibly want to look at a fixed unit trust with corporate trustee to own the property. Perhaps the units could be owned individually by each of you, or by each of you in combination with a discretioanry trust - with an appropriately drafted trust deed.

Considerr:
death
divorce
incapacity

Have an appropriate enduring power of attorney in place. Look at how you will contribute the deposit - possibly with a loan to the trust with an appropriate loan agreement in place and perhaps a charge of the assets of the trust under the personal property security act. Consider who should be the lender to the trust - you, yourspouse, a discretionary trust.

You might even want to consider a partnership of unit trusts with a partition agreemnet so your trust could end up with 8 units and his with 8 or whatever portions.