Subdividing land issue

[bianca]

Getting my subdivision right!

Not sure if this is the right forum, but it does say 'when in doubt"
I have an other "iffy"couple of questions that my little brain just can't decide on.
We have just finished building our new house-7 years in the making-definitely not an overnight dream.Mind you, we fully own it, and onlyhave a $250K loan for the land content left over.
We have been able to claim our loan interest as a tax deduction, as it was originally an investment.We also own our PPR, where we have lived for the past 8 years.
We are now moving into the 7 year dream, and are going to Sell the PPR to our hybridtrust( when and if it ever gets set up)we will get a valuation at the highest market price,to ensure CGT is not going to be too huge an issue if we ever want to sell it further down the track, take out a loan for this amount-probably $600-$650K,pay out the 7 year dream's loan of $250K, then convert the 7 year dream to our PPR and rent out the original PPR. The balance of the money will pay back some of the new loan, so in effect we have just transferred our taxable interest from one to an other, kept the PPR and
also virtually own the 7 year dream. The original PPR will be rented at $550-$600 per week
Question 1 is--will this work?
Question 2 is-- the 7 year dream is sitting on a 3500 sq m block of land which we have fought with council with, to be split in 2. It is finally getting sealed, after a 4 year battle. The land is valued at...yes..cough cough...
$1.5m- we bought it in 1998 for $180k.
It is due to be finalised in a month or so. But, during the ïgnorant"time when we just went ahead and applied for the subdivision, we just said"split the damn thing in half: and didn't think any further. What is going to happen to the block of land? If it is just in our name, as I guess it will be, will it be classed as an investment, and therefore incur CGT if we ever sell it? How are they going to apportion a value to it--at the time of the sealing of the plans?Is it too late to now place this in our trust to be? Should we make sure the whole "loan swapping"has occurred prior to this taking place or wont it matter?
Thanks in advance for the input guys.I want to get this right.

 

[bianca]

Any Takers??

[ How are they going to apportion a value?Is it too late to now place this in our trust to be? Should we make sure the whole "loan swapping"has occurred prior to this taking place or wont it matter?
Thanks in advance for the input guys.I want to get this right.[/QUOTE]

 

[bianca]

anyone?

We are now moving into the 7 year dream, and are going to Sell the PPR to our hybridtrust( when and if it ever gets set up)we will get a valuation at the highest market price,to ensure CGT is not going to be too huge an issue if we ever want to sell it further down the track, take out a loan for this amount-probably $600-$650K,pay out the 7 year dream's loan of $250K, then convert the 7 year dream to our PPR and rent out the original PPR. The balance of the money will pay back some of the new loan, so in effect we have just transferred our taxable interest from one to an other, kept the PPR and
also virtually own the 7 year dream. The original PPR will be rented at $550-$600 per week
Question 1 is--will this work?

 

[thefirstbruce]

So I take it you never made the move to an accountant with property experience Bianca?

 

[bianca]

Hi bruce,

haven't had time this year--its gone by too quickly. Haven't even done 2005 /2006 tax yet! just keeping up with a whole lot of other stuff, has just seen me mozi ing along again. argghh.Also had to turn our business around in the last few months, moved houses,getting the kids organized with their portfolios, etc..total braindrain.Anyway, this living of equity for the past 6 months did not allow the toys to be maintained! and it was getting boring anyway..So, we are back on track. All I need now is to get it right, from the start, because all the other properties are doomed to be in my own name, and I'll probably run over someones cat and get sued for the lot.Did I read you relocated to Emerald?? Did you buy the caravan park? Still booming in Mackay, although the prices for houses are not realistic anymore.
Help me with my subdivision question plzzz?

 

[thefirstbruce]

Hi B,

had a sniff around Emerald and other Bowen Basin locales late last year.....including Rocky, Yeppoon, Gladstone, and H Bay.....

was working with BHP, Mitsubishi, and Wesfarmers, and treated local councillors (I'm a physiotherapist) so got a lot of local knowledge.....came away with the impression the mining companies had most of the land tied up in the mining towns, and locals had the rest.......they were also asking Brisbane prices for house and land up there.....and coal mine head honchos told me contracts would be flattish for a couple of years......though volumes had a bit of growth

Opportunities I considered were

- storage sheds in Emerald...couldn't get land, and existing sheds were tightly held....

- motel in Blackwater.....small town politics got in the way......

- physio practice in Moranbah and Rocky......Moranbah was going to be too remote....and hard to get employees for.....Rocky just didn't appeal for me to live in.......

Came away empty handed.....but renewed vigour to buy near infrastructure in metro Brisbane.....

Regarding your 7 year dream property, you better talk to a good accountant about it.......I can't see how you can claim the capital gain for the last 7 years tax free (thought there was a transfer period limit of 6 months between PPRs)....

An accountant recommended a friend who lived on Brisbane acreage and bought ocean front change his permanent address to the ocean front property.......also recommended the ocean front be valued down before claiming as PPR........(bought oceanfront for $240k....2 years later worth $1.3M, acreage went from $275k to $550k)