Perhaps try contacting your local authority:

WA Tenants Advice Service http://www.taswa.org
WA Consumer & Employment Protection http://www.docep.wa.gov.au

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Gus,

So I get $1,432,000 as a cost base, and $2,000,000 sale proceeds gives you a $568,000 capital gain.

Firstly Capital Gains Tax (CGT) is the tax paid on any Net Capital Gain made on an asset that is sold. In your case the gain will form part of the income the Trust has generated for the year. At the end of the financial year the trustee will need to distribute all income to the beneficiaries, so it really depends on each family members situation.

Each person will then declare a capital gain from the Trust in their personal income tax returns, receive the 50% discount if held for 12 months, then pay tax at their marginal tax rate (see below)

Tax rates 2006 – 07
0 – $6000 = Nil
6001 – 25000 = 16.5c
25001 – 75000 = 31.5c
75001 – 150000 = 41.5c
150000+ = 46.5c

CGT is not a separate tax but forms part of your income tax payable.

Given the large profit I would strongly suggest you talk with your Accountant before proceeding any further.

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Waynel2,

Gosh I missed this thread!

Thanks a million “millions” for the referral, glad we could help out.[biggrin]

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Jt32,

Yes you are correct in that the proportion of borrowing costs for the period the house is your PPOR will not be tax deductible.

We have an example on our website that shows how borrowing costs are claimed in your tax return. Using that example the annual tax claim is only $303 so all you’d be missing out on is a tax claim of $151. Here’s the link:

http://www.propertydivas.com.au/3TaxMang/NegGearing.aspx

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Dacium,

The following is an extract off our website about Subdividing:

What is Subdividing?
Subdividing is when a piece of land is split into two or more pieces (ie separate lots). The process is controlled by the local Council. Planning codes and procedures vary significantly between Councils and also between States and Territories, as do the relevant fees and charges.

Factors to examine when considering a Subdivision
• Local town planning regulations

Land zoning restrictions
Minimum size of lots
Access to water and sewerage services
Setback requirements
Minimum building envelopes
Parks and open space
Easements
Vehicle access including Council refuse collection
Storm water management
Increased noise from new development
Environmental and heritage issues

Hidden Costs
A subdivision can take several months (and sometimes even years) to complete so you must factor in your holding costs such as:
• Interest
• Rates
• Land maintenance – (eg slashing and weed control)

Many astute Developers make the purchase contract for the land subject to the acceptance of a Development application approval with Council. This is usually done with an option agreement (see your Solicitor for more information)

Dividing the Land
Before you rush out and build a new dividing fence in your backyard, you should first consult your local Council for specific guidelines and costings, as it is imperative that the property is divided correctly. Any errors at this stage will cause major problems further down the track.

The Process
Most Councils require a Development/Planning Application to be lodged, together with details and drawings of your proposal. A Town Planner or Surveyor can assist you with this process, and they may also be able to give advice regarding conditions that the Council is likely to require.

Before lodgement of the Application, you can ask the Council for a “Pre lodgement” meeting to discuss your subdivision and determine what issues will need to be addressed in the Application.

When the Council receives your application, they may require you to erect a notice board for public viewing. The purpose of the board is to alert the public of the proposal by providing details of the subdivision. The Council may also write to the owners of the residents of the neighbouring properties advising of your intentions. We suggest that you contact the Council to find out what procedures your local Council uses.

Additional information the Council may require
Water and Sewerage
• Are existing services available?
• Can the existing infrastructure cope with increased use or need upgrading?
• Is permission required from neighbours to access property?

Storm Water
• How will storm water run off be managed?
• Is a drainage pit required?
• Are tanks required to regulate the flow of storm water?

Noise
• Will existing main road traffic noise affect the subdivision?
• If so, how will this be reduced? (Fences and/or earthworks)

Soil Conditions
• Do the soil conditions (eg.sand, clay) impact on road and footpath design?

Other issues
Footpath
Lighting
Signage

Issues for the Developer to consider
For the Developer there are also other issues to consider such as:

“Wasted” land due to unusual configurations
Steep slopes
Flood-prone land
Other planning overlays (ie restrictions)
Other factors that may reduce the number of lots and so profitability.

Approval of the Development Application
The approval process for your Application may take several months depending on the complexity and size of the subdivision.

You will then be issued with a conditional approval covering topics such as:

Developer to supply a plan of survey and mark land with survey pegs
Road reserve
Easements over stormwater, water and sewage mains
Requirement that storm water pipes be designed to cope with a “1 in 100 year” event.
Dust control
Hours of permitted work (usually Mon – Sat 6:30am to 6:30pm)
Headwork contributions to be paid by Developer
Open space (parks)
Social infrastructure
Road infrastructure
Water infrastructure
Sewerage infrastructure
Street scape contribution
Disposal of cleared vegetation
Entry walls or features
Connection fees to live sewer mains
Road (width, pavement depth, footpaths, kerb and channel, ramp profiles)
Street lighting
Fire Extinguisher (Battle axe blocks)
Underground electricity and phone
Erosion and silt management
Maintenance period of roads
Retaining walls
Fire ant inspections
Portable long service leave for Building and Construction Industry
If you are not satisfied with the Council’s decision, you may apply for a review.

Operational Works
Before work can begin, you will need to engage the services of a Civil Engineer to design and draw the sewer, water, road, footpaths and any other Council requirements.

This is a separate application usually referred to as “Operational Works” and attracts additional fees and charges.

Final Stage
All civil work will require Council and Engineering certification. When the subdivision has been completed to the satisfaction of the Council, you can then apply to register each separate title deed.

Conclusion
Land subdivision is a $mart way to fast track profits into your investment portfolio. However, as with all investment decisions, thorough research is necessary in order to balance the level of risk associated and ensure that the process runs as smoothly and quickly as possible, and that the best, most profitable outcome is achieved.

Hope this helps a bit,

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

That is such great news, and well done for not only setting a goal but achieving it in record time.

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

RICH….How about a rich chocolate mud cake….Yummm

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

I’ve seen it layed in a display home and it felt quite soft underfoot. I saw an article on TV the other day saying how it can withstand traffic much better than timber.
Seems to be around $100m retail but like Celeste I’ve seen it go through the auction rooms for only $25m.

We’ll certainly be looking at using it in our next project.

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

I’m not familiar with “Basix” however I do have some experience in doing a removal house. You can read my story by visiting our website.
Here’s an extract of our “Removal House” document:

Removal Houses
Do you love to renovate and enjoy a challenge? If the answer is yes then a “Removal House” may suit your needs.

INITIAL STEPS
Visit your local Council
We suggest that you make your first step a visit to your local Council to find out about local requirements and restrictions.

Each Council around Australia has different procedures and varying fees, so it is imperative that you have the right information from Day 1. For example, it is vital that you know whether you are required to supply a “bond” to the Council, and if so, how much – it can be a substantial amount which you will need to add into your budget.

Later, when you have found your removal house, you will need to check with the Council that your proposals fit in with the overall town planning scheme. (See also Town Planners).

Find your House and Contractor
Next, you will need to find your removal house and a suitable block of land. Removal houses can be found in your local paper, the “Trading Post”, “Yellow Pages” as well as online. Prices vary widely so consider your budget before you embark on your search. Some vendors are businesses that also provide the removal service, whereas others will be private individuals who will require you to arrange for a removal contractor to take the house away and so you will also need to find someone qualified to do this.

Removal contractors will ask you to sign a contract. This should set out the terms and responsibilities of the removalist and state all inclusions, such as bonds, fees, delivery details and services provided. For example, some firms will deliver the house on blocks, whereas others will carry out stumping and some even renovate the house for you. We ALWAYS recommend that you seek legal advice in relation to any legal contract – especially as there is no “standard” contract for the industry – Buyer Beware!!

Choose your land
You’ll also need a sufficiently sized block of vacant land for your house, with no easements or covenants that restrict a removal house from being placed on the block.

Get your Finance in place
Talk with your financier, as many lenders will not take security over a removal house until it is in position and has been stumped.

THE PROCESS IN DETAIL
Inspections and plans
When the Council considers your application for a removal house they will visit both the site and the proposed house to ascertain if it will suit the situation. Consideration will be given to existing neighbouring homes and to the style, materials used, roof pitch and height of your proposed house. Neighbours may be granted permission to view your proposal and lodge objections if they wish, so this is why it is imperative that you research your area first.

As with all building works you’ll need to obtain a soil test so that an Architect/Engineer can consider structural details and design plans for submission to the Council.

The plans will contain details including:

Existing floor plan and details of any alterations
Sub floor, beams, bracing and tie down details
Architectural elevations, location and orientation
Any other relevant information

Lodgement of preliminary plans with the Council will attract fees that vary between States. An Officer from the Council will then prepare a report of recommendations of building work required, such as:

Level of renovation work required – usually no “patching” is permitted and rotten materials must be replaced
Maximum building height
If roof replacement is necessary, including insulation
Generally rewiring all electrical work
Replace/upgrading of plumbing
Installation of smoke alarms
Tie down, bracing and depth of footings
Determine the bond (Amount held by Council until all works are complete)
You may lodge a Building Application simultaneously with the Preliminary Application and again, fees vary depending on the size of the dwelling and number of plumbing fittings.

Payment of Council Bond and other fees
Most Councils charge a bond. This is a sum of cash to be held by the Council until all works are completed to its satisfaction – usually within 12 months. The bond provides the Council with a “safety net” in the event that it needs to step in and take over an abandoned or unfinished job, or one which is not completed to its satisfaction. The bond is often a significant amount and this can put a huge drain on your cash flow. However, it is usually possible to ask for a partial refund as work progresses.

Before the house can be moved, all bonds and fees must have been paid to Council and the appropriate authorities notified. The contractor will need to provide the Council with proof of current insurance and a building services insurance policy may also be required. Bonds also apply for escort fees and security bonds for roads.

Once the house is in place
Make sure your contract specifies who will be responsible in the event that damage occurs when the house is moved. After the house is moved, as with all renovations, you’ll need to have a team of tradespeople ready to start work. The sooner the house is finished, the sooner you can receive your bond back.

A final word…
A removal house requires lots of careful research and planning, but the rewards are enormous. The satisfaction that you will gain from turning a dump into a shining diamond will give you immense pride, and co-ordinated correctly, a very healthy profit too.

SUMMARY OF THE PROCESS
Visit council or town planner
Purchase vacant land
Find suitable house for removal
Engineer report and architect plans
Lodge Preliminary plans with council
Council assessor visits house and site
Pay bonds and fees to move house
Renovate and certified
Certificate of Occupancy
Bond refunded

I hope this helps a bit.

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

Hi Glasco,

I think Sanjiv has given you a sensible price guide there. To make buying your first IP easier, you can also download for free a “Property Budget Planner” off our website (see below), plus I’m sure you’ll find heaps of other useful information.

AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources

“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”