Any progress?
Subdividing in Hamilton Hill
- Thread starter Altrincham
- Start date
Any progress?
my 2 cents
I think Altrincham process decision will be determined mainly by Altrincham's financial position, secondly by his goals for the project.
financial position - getting finance for a new build on a newly acquired retain and sub divide investment property is difficult if the buyer (Altrincham ) does not own other property/assets with good equity or has a monster income, as banks will generally not lend against the future value of the property sub divide - only what the current use of the property is.
So if this is a first investment, I would suggest Altrincham hurry up and get the survey strata sub division process himself done (costs $35k to $55k and will take 6 to 9 months if you're on the ball managing tradespeople and research thoroughly how to prove satisfaction of all conditions of sub division approval). Once the new title's are issued, the banks will value each title separately and the extra equity with allow Altrincham to get better and easier finance lending options to build a new home.
Goals for the project.
Altrincham do you intend to keep any of the properties you are creating? or are you likely to sell it all and roll the profit into the next deal?
If you wish to sell it all, then quickly commit to reno the house, sub divide the land and get in on the market 12 months and 1 day from the date you signed the initial O&A to purchase the property, do not accept an offer until a year and a day after the purchase contract date - so any capital gain profit you have made you can use the 50% capital gains tax exemption.
If you intend to keep one of the properties, or you are intending to live in either property and use the PPOR full capital gains tax exemptions then let us all know, as advice on process could change.
Building on the newly created block and selling
In one of perthguy's previous posts, he shone a small light onto the complex world of how a newly built investment property when sold within the first 5 years is treated tax wise from the ATO if you sell it. There is gst obligations, no capital gain discounts, yada yada - speak to your accountant as the additional tax costs usually out weigh the extra potential profit made in a tight deal in my opinion.
Good luck
I think Altrincham process decision will be determined mainly by Altrincham's financial position, secondly by his goals for the project.
financial position - getting finance for a new build on a newly acquired retain and sub divide investment property is difficult if the buyer (Altrincham ) does not own other property/assets with good equity or has a monster income, as banks will generally not lend against the future value of the property sub divide - only what the current use of the property is.
So if this is a first investment, I would suggest Altrincham hurry up and get the survey strata sub division process himself done (costs $35k to $55k and will take 6 to 9 months if you're on the ball managing tradespeople and research thoroughly how to prove satisfaction of all conditions of sub division approval). Once the new title's are issued, the banks will value each title separately and the extra equity with allow Altrincham to get better and easier finance lending options to build a new home.
Goals for the project.
Altrincham do you intend to keep any of the properties you are creating? or are you likely to sell it all and roll the profit into the next deal?
If you wish to sell it all, then quickly commit to reno the house, sub divide the land and get in on the market 12 months and 1 day from the date you signed the initial O&A to purchase the property, do not accept an offer until a year and a day after the purchase contract date - so any capital gain profit you have made you can use the 50% capital gains tax exemption.
If you intend to keep one of the properties, or you are intending to live in either property and use the PPOR full capital gains tax exemptions then let us all know, as advice on process could change.
Building on the newly created block and selling
In one of perthguy's previous posts, he shone a small light onto the complex world of how a newly built investment property when sold within the first 5 years is treated tax wise from the ATO if you sell it. There is gst obligations, no capital gain discounts, yada yada - speak to your accountant as the additional tax costs usually out weigh the extra potential profit made in a tight deal in my opinion.
Good luck
Also, location is huge in Hammy Hill as some areas are not desirable, however, if you are near the Manning Park precinct the builds will fetch much higher price. All this needs to be considered, I have recently seen villas selling for $580K, in the Manning Park pocket.
Hope you are in the right pocket as the build may be a goer.
