Is it possible do anything better here?

My friend's family with my family are buying a land from landcom in NSW which is suitable to build a strata titled duplex. We still haven't exchanged the contract. Currently the all the four names are in the contract.

Our end goal is to build two duplexes and hold long term. My friend's family like to hold one of the duplexes and the other duplex will be for us. Unfortunately landcom will not allow us to buy the land in structure like unit trust etc.

What is the cost effective way to achieve the end goal. Your ideas are greatly appreciated.
 
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Two duplexes on one Landcom lot ?? That would be new.

I presume you mean one duplex comprising two dwellings. The stamp duty issues may be expensive. I recently guided a client to partition two titles on adjoining lots that were both 50/50 TIC. They each wanted to own one. Cost $10K + but no duty. A CGT trigger too but with the Main Res exemption you may be OK.

You may have misunderstood Landcom. They don't allow a Corporate Trustee or company ownership. You should speak to a lawyer about other ways to create a trust that uses human trustees. The Trust needs to be a NSW Land Tax Unit Trust of course. That addresses the need for a 50/50 ownership split. However the problem remains - Its all on one title...Strata ? Maybe.,

I see a load of issues here. Just the borrowing itself would be a concern. If one family paid cash and one needs to borrow how do you do that ??
 
Paul,

Thanks for the response.

Sorry for the confusion caused. Yes its one duplex with two dwellings.

We spoke with council and the council would allow strata subdivision. Landcom advised me that they allow individuals name in the title.

It should be OK for us to buy land outright using equity. However for construction we would require additional loan. Both dwelling will be used for investment purposes. As you mentioned there could be capital gain issues also.

As you suggested, there could be other ways to manage this. Who is the best person in SS to get advice on this?
 
For advice on human trustee issues ?? Terry Waugh is able to give legal and tax advice and understands the loan issues well...Qualified in all areas.
 
Paul,

Thanks for the response.

Sorry for the confusion caused. Yes its one duplex with two dwellings.

We spoke with council and the council would allow strata subdivision. Landcom advised me that they allow individuals name in the title.

It should be OK for us to buy land outright using equity. However for construction we would require additional loan. Both dwelling will be used for investment purposes. As you mentioned there could be capital gain issues also.

As you suggested, there could be other ways to manage this. Who is the best person in SS to get advice on this?

Give a call to OSR and ATO to find out the stamp duty, CGT and GST related to partition. My understanding is that it won?t be substantial for a strata subdivision
 
Give a call to OSR and ATO to find out the stamp duty, CGT and GST related to partition. My understanding is that it won?t be substantial for a strata subdivision

Duties Act NSW - partition $50 minimum. In many cases as described there may be no further duty but legal advice is required to confirm that nature of the partition and the changes in equitable interest arising from the partition. Deed of partition is a key requirement. Legal advice would be first issue. I wouldn't expect a GST issue if there is no enterprise. Due to the inherent use of the land and the nature I wouldn't envisage a CGT issue on concern. Yes there is a CGT event but likely that the impact may be minimal to nil.

All the issues will relate to lenders and how a partition may affect future holding. ie One wants to sell, one doesn't etc. Loan security and liability etc.

The Rulings on Partitions usually adopt the example of two Lots A & B jointly owned by A&B and at the completion A takes Lot A and B takes Lot B. In this instance the land is a single lot and cannot be subdivided. One title. That issue poses the greater concern.
 
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