My reno

Good and bad news

Looks like yes i am up for cap gains no matter how long i live in it...

The good news is that I am pretty much retired these days with no mortgage and much less income then previous. We are into the retire early, minimalistic living idea in our household. So together with improved tax breaks for lower income earners this should help lower any cgt - if and when we ever decide to sell.

Looks like this house will be a keeper if i can help it.

The main reason I am renovating this house myself rather then go the convetional route hiring a builder from go to wo is because I really want my house to have a bespoke feel about it. I have the time, energy and cashflow to try and make it feel unique and make necessary design decisions at the last moment if need be. I find it hard (as does my wife) to envisage colours, textures, lighting etc so far out. I like the idea of going stage by stage, see how the natural light works, taking samples, taking time, realising opportunities for interesting little features, all the while saving money doing much of it myself.

It also helps I dont live in the house im renovating. It also helps the house is a 3 minute walk...

The other good news is that although i am looking for an off the rack kitchen probably from masters or Ikea i have found a stone mason around the corner whose willing to supply, cut, polish and install a caesar stone / quartz benchtop 2 m x 84 cm (2 cm think) for less than 1k.

This for me is great as i budgeted quite alot more. It will allow me to increase my budget for cabinets from 7 or 8k to around 10k. Or maybe do the sensible thing and just pocket the savings.

My next major thing is to find excellent reclaimed or remilled floorboards for aroung 50 bucks per sqm...need around 70 sqm. Dont want pine or tas oak.

Having trouble finding anythind decent for under 100 bucks per sqm

If anyone has any ideas please shoot

cheers
Aussie
 
If you have owned it for 7 years as a rental, could you sell it to your wife (assuming it is in your name). You will pay capital gains tax on the gain so far (which you pay anyway - whenever you sell).

You sell it for the cheapest you can get away with but must have comparables to support the figure. It then becomes purely PPOR and the big renovation will be done to increase it's value but you will not pay any tax on the gain you will one day make.

Does this sound like a workable plan?
 
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If you have owned it for 7 years as a rental, could you sell it to your wife (assuming it is in your name). You will pay capital gains tax on the gain so far (which you pay anyway - whenever you sell).

You sell it for the cheapest you can get away with but must have comparables to support the figure. It then becomes purely PPOR and the big renovation will be done to increase it's value but you will not pay any tax on the gain you will one day make.

Does this sound like a workable plan?

sounds reasonable wylie except its in joint names.....

The thing that could work in our favour is that between you and me i dont expect house prices to go anywhere for a long time yet. So I dont see too much increase in value from the current base over the next 7 or so years.

So that means over time as my cap gains exposure becomes less as a percenatge of total ownerships time - then this should work in my favour.

In other words if i sell now i might be locking in a cgt premium.

In short would look like this....

Imagine reno done - sell price 1 million - our cap gains exposure is around 75k in todays market.

If in 7 years time price is still 1 million our cap gains exposure is down to 37.5 k...because it was a rental for only half the time...

And you know what even if there is a boom paying a larger cap gain is not a bad problem to have. So all up we in a pretty good position no matter the outcome.
 
Renovating is not a waste of time, as you've clearly indicated by doing your due diligence before you even begin any physical work.

The real capital gain you'll make out of a renovation project is usually decided before even a single lick of paint is given, or any work is done, for that matter.

The bulk of your work should be (and looks like it it) focused on cost analysis, spreadsheets, sourcing multiple quotes for materials and then labour. But this is not where the number-crunching ends.

If your projected profit is still decent, then pursue it. For renovate and hold; calculate (and get quotes) for what the rental return would be, once completed, then see how this affects the monthly holding-costs for keeping the property. If this is positive, then the reno project is worth pursuing.

Cameron McEvoy | Property Spectator Blog-Keeper; Contributor - Property Observer Australia

http://propertyspectator.blogspot.com/
 
As a matter of interest we're planning to do something simular to our PPOR (therefore zero CGT :) )
In inner North West Melbourne also to a period Victorian (double fronted) although freestanding.
Keeping front/main 5 rooms (2 bed, main bath,study & dining) and knocking down the rear (about 9m W x 4.5m long + veranda ~1.5m)

Will be retaining same footprint (rear veranda will be about 1 mtr wider)

House is on a small slope so will be adding basement for storage & laundry
(about half below ground level & half above)
Replacing open plan Lounge & kitchen (which will open into existing dining)
New upstairs main bedroom, WIR & onsuite + small Balcony

Indicative quote with our builder of choice is $270k to $300k (decent fittings - Smeg &/or Bosch & Roger Sellers ;) ) plus Architects fees (quoted ~ $20k)
 
As a matter of interest we're planning to do something simular to our PPOR (therefore zero CGT :) )
In inner North West Melbourne also to a period Victorian (double fronted) although freestanding.
Keeping front/main 5 rooms (2 bed, main bath,study & dining) and knocking down the rear (about 9m W x 4.5m long + veranda ~1.5m)

Will be retaining same footprint (rear veranda will be about 1 mtr wider)

House is on a small slope so will be adding basement for storage & laundry
(about half below ground level & half above)
Replacing open plan Lounge & kitchen (which will open into existing dining)
New upstairs main bedroom, WIR & onsuite + small Balcony

Indicative quote with our builder of choice is $270k to $300k (decent fittings - Smeg &/or Bosch & Roger Sellers ;) ) plus Architects fees (quoted ~ $20k)

looks like a good quote...im guessing you are in coburg or pascoe vale?

Good luck!
 
looks like a good quote...im guessing you are in coburg or pascoe vale?

Good luck!

Thanks

A little bit more West - Moonee Ponds

Did sound a little expensive too me at first, as I haven't done this level of reno/extension before and considering what you can build a new house but we are getting the most expensive bit done (Kitchen & a bathroom)
 
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