Forum Replies Created
Thanks terry,
I am prepared to wait, the property is in Vic.
My main concern is that I wait for the settlement to go through and then the contract is made void for some reason,
Thanks Terry,
I spoke to the SRO today. I was told it would be best to fill out the form as having no partner. As this was the case when construction began.
They also informed me it was a grey area as to if the grant would still be payable.
V8ghia,
You are correct the FHOG is often payed at slab stage, but as my job is an owner builder, the grant is only payed out at the end.
I received my letter from the bank today, they have admited some fault in the delay. I will submit the FHOG application on Monday and see how I go.
v8ghia wrote:You've lost me a bit there I'm afraid.
Are you saying you started building a house and then tried to arrange finance afterwards, before you gave your lender any of the plans, etc or did your application? WHile there is not much detail there, that is a situation that can be an absolute nightmare…..especially if an 'owner builder.'
And then you say you are concerned the bank has cost you the FHOG when you have a tenant ready to move in? Not sure how that will work – unless you are 'being creative' (?) for a few months.
The FHOG would not normally be payable until the slab goes down – stage one. SO had you applied for finance before then? IF not, why did you not do the claim yourself as you would have been eligible (and responsible really) to do so yourself.
I guess if the bank has genuinely lost the signed copy of your mortgage you could refuse to sign it……..but then again how would you repay the loan you have signed for when it is 'called in?' That's right…..you could sell your house!I had wanted to keep this thread on the topic of the missing document, so I was a little brief in describing the delayed finance part of the story as it has many twists and turns which would sidetrack this thread.
I honestly dont know where to start in terms of where the stuff ups began. I agree starting an owner build job before finance is confirmed is not the best way to go about things. To cut a long storyshort the fact that building had commenced before funds were secured had very little influence on the problems at the bank. The budgeted figures were well documented and a valuation was done by the bank when the loan was finally approved. (even the valuer stuffed up his paperwork and caused another 3 week delay).
With regard to your FHOG question. The tennant is a friend needing a 6 month lease, then I move in. All legal.
The FHOG is not payable when the slab goes down. It is payable when a certificate of occupancy is issued at the end. So I could not apply until the house was finished. The SRO states the build must take no more than 18 months. Total build time was 20 months, bank delay was 6 months.
The bank is currently preparing a letter to admit the role they played in the delay of the construction.
In Victoria a building licence can only be held by a person. A licence cannot be issued to a company. If a company wishes to do building work it must have at least one director who is a licenced builder in the appropriate category. His name and licence number must be on the permts etc.
I would like to know the details of how this builder does get away with it. I would expect the warranty insurance provider to pursue him to recover costs.
Thanks Terry,
I did a quick google of the two types of mortgage you mentioned. There didnt seem to be much difference betweeen the two as far as I could tell.
Could you please outline the fundamental difference between the two.
Thanks.
Thanks for the replies,
In one sense you are correct samson, i probably cant afford a holiday house of this size. But I can afford one for the 10% of the year that I can actually use it, and would like to get something back for the other 90%of the year.
I do want to keep it all above board, but at the same time I want to get every dollar back that I am entitled to.
Seems that as usual alot of this would come down to documenting, or otherwise proving, to the ATO that you are doing what you claim to be doing.
Thanks for the info,
Interesting point about the 40% rate and 40% of expenses claimed.
Realisticaly i dont expect to be able to spend more than 5 weeks there a year at the moment. We are currently advertising at a reduced rate through social networks to generate interest and then hopefully book out more of next year at a higher rate.
Thanks Terry,
I have purchased new furniture to help with the holiday rental. This will be depreciated over time with the rest of the house. I also have a boat and motorbike that are kept at the house at all times. Would it be possible to now claim the depreciation, registration, insurance and maintenance of these items? Of course i would have to say they were available to tenants to use and there would be the added risk and insurance issues.
Seems to make sense in theory.
Michael,
I appreciate your advice.
But,…
Adjustments would just involve changing the date of invoices to more accurately represent when the work was done, rather than when the invoice was issued. In my industry income over each period can vary alot depending on many factors, including billing cycles.
Also would the ATO really be concerned with tax being paid 12 months EARLIER?As for the advice anyone may give me, Isn't the whole forum system based on people comparing their thoughts and ideas for free, without complete strangers being sued if it doesn't work out, If this happened wouldn't the whole forum system collapse?
Anyway….any answers to my question???
Also how do banks compare the income of someone who has already paid for their car, phone, rego, fuel, insurance etc..through the busines, leaving mostly disposable personal income. With someone who has to pay for all these things out of their total income. Is there a set amount used to factor in these sort of expenses.
Thanks for the quick response Richard,
You are right, I should have provided more details.
Not married
No dependants
No credit defaults
Have one credit card with $1000 owing, $5000 limit (Thinking I might cancel this card or reduce limit prior to loan application)
The new property is located in Airport West, about 8km from the CBD in melbourne with excellent access to transport, schools, shops etc. Good rental demand. In summary an excellent IP location.Which lenders will take just the 08-09 figures? My income can vary alot over different years.
Thanks for your help
Linar
"Some of the Reno Kings' practices look really nice but don't last long (eg, painting grout on floor grouting) so they are only really of any use if you are going to sell the property and don't care what happens after you have sold it.). "
Good point
I have a bit of a moral issue with some of the "slap it together and sell it quick method". I know its a buyer beware market but it wont be long before some of these "Reno Kings" are poping up on A Current Affair alongside used car sales men, due to dodgy practices.
depends on a few things,
If the carport is on or near a boundary it generally doesnt have to comply with the same rules as a garage in terms of fire resistant materials.
But if the carport is going to be enclosed it will most likely be classed as a garage, there is a definition in the BCA on what is "enclosed". Any walls on the boundary side will need to be fire resistant.
If it is not on the boundary and you are just filling in the walls, ie no structural work, I would think you would not need a permit.
sounds like you have a rough idea of how development finance works, most of your post is correct.
Generally a development loan is first obtained and then drawn down, (claimed) at various stages, eg: slab, frame etc..
There are no payments to be made during the course of the construction, BUT, the entire balance is due at a pre determined date.
The builder/ developer will usually be paying himself a supervision fee for his time spent running the job and should treat himself as a seperate entity to the development, just like any other contracter on the site. This is how he manages to maintain an income. He is still working for someone, his development company.You will also find there are often silent partners in developments that are helping with the finance, although it may appear the young builder is doing it all on his own. I was 29 and ran a $2.5m project just after getting my building licence, i got strange looks from people when i told them i was the developer and they probably wondered where i got the money, one even straight out didn't believe me and then mumbled something about "daddy's money" But i had a viable project, with a high profit margin and two good partners. So we got the finance after a while.
Experience helps alot, pre sales (difficult), and the ability to get the project through to permit stage before needing finance. This way the bank can get an expected end valuation from the stamped plans of the proposed project and apply their loan to value ratio and other tests.
As for what the bank wants to see, they want EVERYTHING! Anything you think might be relevant, they will ask for. I havn't applied for finance lately but hear it is more difficult for developments now.
property experts? yes they are here
balustrade experts? look up the yellow pages
Scott no mates was spot on with his advice.
With a vague question you cant expect more than a vague answer, photos? measurements? access? scaffold required? repairs to existing surfaces? waterproofing requirements?
There are a few places that can supply stainless steel balustrade with clamp type fittings which hold the glass in place. I found it cheaper to source the balustrade and glass seperately and install it myself. Only attempt it yourself if you have the necessary skills and equipment.
finish everything!! (except carpets and curtains) then do a big clean up before getting the floor guys in. Any large gaps under external doors or in windows should be taped up to prevent dust entering during drying time. Allow about a week from start to finish for the polishing.
As an example of the benefit this provides, for a small business being conducted through a corporate structure, for every $1,000 of eligible asset acquired, the total tax relief will be $1,500 – or $450 after tax, resulting in an overall after tax cost of $550 for a $1,000 acquisition cost.
I think this example is a little misleading when applied to vehicles. It assumes you are able to claim the 50% bonus as well as the 100% of the initial purchase in the first year. The 100% is still depreciated normally.
As posted earlier a $30000 car would only end up costing $16500 !! after tax return (Wish it was true, i would buy a new car tommorrow).
Dont you just get back 30% (company tax rate) of the 50% ?
So it really just knocks off 15% of the purchase price, not bad, but not as good as some people think.
i remember wondering how all those highly geared property gurus featured in magazines a few years back were coping when interest rates were pushing towards 10%. Any that survived would be doing ok now i guess.
measure the height and width of the gate required and go to bunnings or similar. They have a range of un-assembled steel frames that can be assembled to almost any size. They are pre-hinged also. Cost $60 – $80. You will also need pickets or pailings to clad the frame, some screws suited for going into steel. And maybe a post to hang the gate off, concrete for the hole also.
When you account for your time to pick up and assemble the gate $250 might seem cheap.
Dodo
I have wondered about this situation before also. But unless you are refinancing is the bank going to be aware your property has dropped in value? Would they be doing a valuation unless you are refinancing?
