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  • Profile photo of NoobugawaNoobugawa
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    @noobugawa
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    March 30, 2015 - 1:11 pm

    U do realise on average Australian household have far more debt than 20 years ago which means it doesn’t take as much a rise in interest rates to combat inflation etc? What this means is that interest rates will not go back to 7-9% like 15 years ago. Look up Japan’s lost decade and you will get some sense of our interest rate for the next 5-10 years.

    Profile photo of NoobugawaNoobugawa
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    March 18, 2015 - 11:42 pm

    Thanks Terry.

    Let’s say settlement for the original full block hasn’t occurred yet. Can parties A and B still do this to ensure they don’t pay associated taxes and duties twice?

    How exactly do A and B enter into a deed? Do they go to a lawyer to do this? If so, what costs can we expect?

    Sorry to bombard you with all these questions, settlement is in a couple of months and there is still time to amend the purchase contract if necessary.

    • This reply was modified 9 years, 8 months ago by Profile photo of Noobugawa Noobugawa.
    Profile photo of NoobugawaNoobugawa
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    March 8, 2015 - 9:27 pm

    Actually engineering at stage 3 is additional $3500. So total is more like $23k to get the stage 3.

    Profile photo of NoobugawaNoobugawa
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    March 8, 2015 - 5:58 pm

    Thanks for your reply Pimobpi. I’ve spoken to a few builders and town planners last few days which pretty much confirmed what you said.

    Some town planners do two townhouses up to building permit stage for as little as $5-7k, most are between the $15k to $20k mark. So I think mine is little on the high side but I am happy to pay as the architect has done numerous townhouse and luxury homes around the area.

    Profile photo of NoobugawaNoobugawa
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    March 2, 2015 - 12:55 pm

    Yeah. Council rate going up is no problem. Just wondering if anyone has built first before subdivision and whether it’s more advantageous doing it this way instead of subdivision and building at the same time.

    Profile photo of NoobugawaNoobugawa
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    February 28, 2015 - 7:58 am

    $70k!!! Why so expensive.

    Profile photo of NoobugawaNoobugawa
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    February 27, 2015 - 3:40 pm

    Nah. They were not giving tax advice, that is the job of accountants. They merely confirmed to me the existing loan can stay unchanged after subdivision or they can divide it into two separate loans one for each block. They did say it’s very rare to ask borrowers to top up the loan after subdiv and demolition as long as we can show that we are building new townhouses on the blocks immediately after. The building cost can be out of my own pocket or they can organise construction loan.

    Profile photo of NoobugawaNoobugawa
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    February 27, 2015 - 1:28 pm

    Lol. Why r u concerned Terryw…

    Profile photo of NoobugawaNoobugawa
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    February 27, 2015 - 9:38 am

    Thanks TerryW. I managed to get through to a home loan specialist at my bank this morning and she confirmed what you said. ;-)

    Profile photo of NoobugawaNoobugawa
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    February 27, 2015 - 7:46 am

    Yes. I see what you are saving now. With the apportionment of the loan according to land split, is that something the bank does when they divide the original loan into two loans or is it something I need to do with the help of an accountant and professional valuer?

    Profile photo of NoobugawaNoobugawa
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    February 26, 2015 - 10:18 pm

    Hum. I think banks tend to offer better variable rates for a single loan of a larger amount, say $1m loan can get var rates of 4.3% for example.

    Profile photo of NoobugawaNoobugawa
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    February 26, 2015 - 10:15 pm

    Thanks Qld007. Very helpful comments. The house is very old and tiny 2 bedder with a colourbond roof. So the value is mostly in the land. Isn’t subdivision usually going to create instant value in the land when approved so it’s rare for banks to value subdivided blocks less than the initial value in an appreciating market?

    With the maximising loan question, what if the existing loan is $1m but at the same time we have $990k cash sitting in the offset account and the $$ will then be used to pay for construction of two townhouses.

    When subdivision occurs, would the bank split the original loan into two separate loans and one for each subdivided block?

    Whatever amount we withdraw from the offset to build the townhouses will drive up the loans and am I correct to say that the amount taken from the offset to build the investment prop and the separate loan attributed to the subdivided block on which the investment property sits, is interest tax deductible? Gosh am I over complicating things here…

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