Hi all

Thanks for the comments

the point of this is to obtain finance. Parents no longer work, therefore no way to get finance to construct.

Big four banks are preferring applicants as opposed to guarantors, plus only 50% of the income of guarantors can be commited to the construction loan

Therefore, only way for a bank to be comfortable (and even then some are saying that all applicants should have an equal share in the title) is to be on the title and therefore have a registered interest – and cheapest way to do this is via having a 1% ownership in the property

I am getting conflicting advice regarding the tax implications. The ATO said, that as long as it has always been parents' PPOR and post construction the house is used for a minimum 3 months as a PPOR, then the whole process/transcation/capital gain event will not incur CGT. The ATO said this to me via phone on 3 separate occasions by 3 separate pople.

They even said, that although the title is changed [Yes, capital gain event] (via adding the children as 1% shares), us (children) have always lived in the house and still live in the house to this day. Post construction we will all (as a family) intend to live in it for a minimum 3 months or more to qualify for CGT exemption, and therefore, if everything I am saying is correct, than upon selling the house, there will be no CPT applicable, given it has always been the PPOR of the parents (pre-title change) and was the PPOR of the children (post title change) during the time that they were on the title. Also, it is not feasible that we live on the land during construction, however I understand the ATO has exceptions for this given people obviously cannot live on a property whilst the house is being built.

The ATO said that although I am demolishing and constructing, this would not affect the pre-CGT given the house has always been PPOR and, given its state of dis-repair, a new house would not affect CGT.

My problem is, this ATO advice conflicts with the advice I have gotten from 2 different accountants in Sydney, although one other accountant did say something very similar to the ATO

So, my problem is that I still can't find a good accountant – a part from calling Yellow Pages and speaking to them and then getting mixed responses – which just makes me confused as to who is correct or not?

I am considering a private ruling ….

Any advice people??

Thanks for your help people

Evolve – where are you based in Sydney? Send me a private message and we can discuss further

Thanks

Thanks Jazz77 for the comments!!!

So they are known as 'development loans' and funds are drawn down at various intervals of the process, with the repayment not due until the pre-determined interval.

Who did you use to finance your development project? Anyone that you can recommend in Aus/Syd? If you like, PM me and can have a more detailed discussion.

Also, what does 'pre sales' actually mean?

The ability to get the project through to approval stage without finance, may mean obtaining finance for the actual acquisition of the site via another loan (unless of course I already own it/under an existing loan etc), and then obtain a separate loan for the acutal development. Would this be feasible, or wouldn't i just be increasing my finance costs.

Would it be preferable to have the whole project (site acquisition, approval, construction, sell) under the one loan?

Thanks for your help Jazz!