No GST. Its vacant land and existing resi housing. One of the reasons to sell vacant land since GST erodes profit if a build happens.
how to make $110k 12mths without quitting my day job
- Thread starter Erica
- Start date
No GST. Its vacant land and existing resi housing. One of the reasons to sell vacant land since GST erodes profit if a build happens.
detailed break down of subdivision costs
The quote from my surveyor of the expected cost of subdivision for this project- to create one new additional Torrens Title alloment:
Development Assessment Commision lodgement fee $1200
Surveyor fee for preparation of DAC proposal and lodgement $770
SA water new connection fee (sewer IP and water meter) $6850
Open space contribution fees $6500
Final site survey and plan of division $2000
Trust me when I say unexpected fees WILL pop up
This site needs a sewer main extension so I am budgeting in another $10,000 for that, I will not know the exact cost untill much later in the subdivision process.
From memory there will be Title registration fee when the new titles are finished
No costs to upgrade SA power networks infrastructure as power is within 25m of the proposed new vacant lot.
No money to spend clearing the back yard as there are no trees just a shed- and a friend is happy to take it down for me to get a freebee.
So I'm rounding it up to an even $30k for subdivision.
The quote from my surveyor of the expected cost of subdivision for this project- to create one new additional Torrens Title alloment:
Development Assessment Commision lodgement fee $1200
Surveyor fee for preparation of DAC proposal and lodgement $770
SA water new connection fee (sewer IP and water meter) $6850
Open space contribution fees $6500
Final site survey and plan of division $2000
Trust me when I say unexpected fees WILL pop up
This site needs a sewer main extension so I am budgeting in another $10,000 for that, I will not know the exact cost untill much later in the subdivision process.
From memory there will be Title registration fee when the new titles are finished
No costs to upgrade SA power networks infrastructure as power is within 25m of the proposed new vacant lot.
No money to spend clearing the back yard as there are no trees just a shed- and a friend is happy to take it down for me to get a freebee.
So I'm rounding it up to an even $30k for subdivision.
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hi Jim1964
GOD HELP ME, NOT ANOTHER SEWER MAIN EXTENSION!
I couldn't help it, I really tried to avoid it, sob sob, but in the end I just had to buy it anyway, and budget the extra $10k into the subdiv costs, I got the property for the right price and it is in a really nice location...
GOD HELP ME, NOT ANOTHER SEWER MAIN EXTENSION!
I couldn't help it, I really tried to avoid it, sob sob, but in the end I just had to buy it anyway, and budget the extra $10k into the subdiv costs, I got the property for the right price and it is in a really nice location...
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This is certainly a good strategy for you. It's less time intensive, less skill intensive and lower risk.
Everybody has a strategy which will fit their stage of life. As much as I'm sure your 4yo enjoys bringing his Tonka trucks to a building site, it is not always easy fitting in the time.
Tweaking this plan from the lessons learnt on the last one is how we keep going forwards and getting better.
Keep up the good work and sharing Erica.
Why is there no GST on the sale of the vacant land? I'm doing a similar project in qld and was told that the creation of a new block then results in GST on the sale as it is the first transaction of that property?
Well done Erica. I'd love to compare notes sometime. I think we are pretty much at the same stage with our splitters. Although my plan is to sell the existing house and build a project home to keep as a rental.
That's interesting, I wanted to do something similar as you beachgurl (split and sell vacant land) and asked my accountant about the tax implications - he also said no GST would apply because we are approaching this option as an investment and not a business venture.
Because GST is exempt on real property except when it is a 'taxable supply' (i.e. new dwellings). Even when new dwellings attract GST there is the margin scheme so only the 'margin' is taxable as GST.
Well atleast you are realistic with the return you wish to achieve a real return not somersoft 80% returns.
Sounds like a good little project goodluck with it and keep the updates coming as its educational for the people that are new to developing property.
erica, im not sure why your writing style has turned out to be a like a spruiker, bold text, emotive language, emotive words, statements like "to replace my day job"
your first project, god bless you for giving it a good shot, was only 8,65%,
this project, you are going to lose 50% through to CG, there doesnt seem to be much contingency involved,
Id tread very carefully, as you may see your profits go down by about 30% due to unforseen circumstances,
but good on you for trying
your first project, god bless you for giving it a good shot, was only 8,65%,
this project, you are going to lose 50% through to CG, there doesnt seem to be much contingency involved,
Id tread very carefully, as you may see your profits go down by about 30% due to unforseen circumstances,
but good on you for trying
That's great.
Starting with smaller projects and then building on this is the way to go. Certainly learn a lot by getting your hands dirty, you cant do this by just reading a book, it just wont cut it.
There are so many minefields with developing, one area that does not get a great deal of attention when it comes to developing is...... "what if the market turns", this seems to be ignored, or just not considered??
One can start a project and the market is strong, on completion perhaps 12 months down the track the market goes to cr.p. One way of mitigating this risk is to ensure if you can not sell you can hold and rents will cover the loan repayments. Another is to ensure you stick to areas that will be in more demand, building in the sticks will also perhaps be higher risk.
Just some of my thoughts, and good on you, keep going with it, upwards and onwards.
Cheers
MTR
Just thought if I shared my journey here some others reading Somersoft might find it usefull and educational, just like I have loved reading other peoples threads about many topics and have learnt more through SS over the last couple of years than any book on realestate investing.
True that.
My last project saw a modest market fall (which applied to the whole of Adelaide really) over the 3 years it took to complete. I am mindfull to never count any projected rise in market value in my end profit margin figures, as it may not eventuate at all.
And, as for a market fall, it sure is possible, I think Adelaide will be particuarly susceptable to an interest rate rise dampening the only slight market improvement we have seen in the past 12 mths, we have only just got back to the median price peak of 2010.
You go girl!
A busy week
1. surveyor did a quick check of site remotely, to confirm my measurements are roughly correct (within half of a meter)
2. surveyor prepared plan of division and lodged with the Development Assessment Commision, application fees paid
3. Building designer created concept plan for me (to show council how the requirements for minimum block size, private open space and off street carparking for 2 vehicles will be met, for the existing dwelling)
4. Designer also drew up a plan of a new build that will fit the proposed new vacant allotment, again to show council minimum requirements can be met for set backs, p.o.s, parking etc, and also to serve as marketing material as I plan to advertise this allotment as a 'house and land package' when all approvals are granted
5.Development Application lodged for Planning Consent only with the local council (City of Marion, Adelaide), application fees paid
Did i mention I still have 4 weeks to go before settlement...
Fingers crossed for a quick approval
1. surveyor did a quick check of site remotely, to confirm my measurements are roughly correct (within half of a meter)
2. surveyor prepared plan of division and lodged with the Development Assessment Commision, application fees paid
3. Building designer created concept plan for me (to show council how the requirements for minimum block size, private open space and off street carparking for 2 vehicles will be met, for the existing dwelling)
4. Designer also drew up a plan of a new build that will fit the proposed new vacant allotment, again to show council minimum requirements can be met for set backs, p.o.s, parking etc, and also to serve as marketing material as I plan to advertise this allotment as a 'house and land package' when all approvals are granted
5.Development Application lodged for Planning Consent only with the local council (City of Marion, Adelaide), application fees paid
Did i mention I still have 4 weeks to go before settlement...
Fingers crossed for a quick approval
I have missed out on may of these subdivide and retain sites over the last several months, they tend to sell after the first open for advertised price with private treaty. And I was out bid on about 6 properties at Auction, some going for what I considered astronomical prices, glad I kept my cool though, and stuck to my budget, I think I only managed to pick up this one because it is in very poor condition and needs extensive renovating to repair- not just cosmetic upgrading.
Marion are Development friendly,one of the better councils to deal with.
I'm halfway through my third one of these at the moment. Same sort of profit but lower purchase prices so approx 30% return.
I live in them during the process though so CGT has been basically zero so far.
Agree the money is in the subdivision. Building adds risk and very little chance of a resale return unless your the builder.
The problem is finding enough suitable properties with enough profit margin.
RC
I live in them during the process though so CGT has been basically zero so far.
Agree the money is in the subdivision. Building adds risk and very little chance of a resale return unless your the builder.
The problem is finding enough suitable properties with enough profit margin.
RC
