Forum Replies Created
Thanks Jeano and Paul. I know there is always a way, its just a matter of finding the right person to help with the right paperwork…
Scott.
Does anyone have knowledge or experience with Stamp Duty on Option Agreements used for renovations in Victoria?
I do renovations for a living and I'm very interested in using Option Agreements to control the property during the reno, re-assign to a future buyer once complete and have them execute the option and take ownership of the renovated property. I'm usually in and out of a property within 6 months.
I just spoke with the SRO and they said that stamp duty is payable on the contract price agreed in the option if land development is performed while I hold the option. They define Land Development as, among other things, any change that improves the value of the land. For the purpose of duties, they define land as including all capital fixtures (buildings) that sit on the land. The person I spoke with said Land Development would include things as simple as landscaping or painting the house.
I have used options and lease/options in the past, but not for many years now.
Is this the experience of others, that stamp duty is payable as a result of doing a renovation to a property controlled via an option (no lease, just a call option)?
Thanks,
Scott.
Nick – I’m interested in this. Can you contact me? [email protected]
Thanks,
Scott.Renovating For Profit (Cherie Barber’s company) offer RPDATA. I used it for Victoria until recently and only stopped using it because the Victorian Government forced RP Data to censor the sale date and sale price when used by anyone who is not a licensed real estate agent. I’m currently searching for other ways to access the uncensored data. As you are in QLD, you will have no problem.
PriceFinder is available through RealestateInvestar. I also used this for a while, but they too suffer the same ridiculous restrictions imposed by the Vic govt.
Scott.
I spoke to PnP but ended up paying a local drafting company $5500 for this same service. I have found the service of the drafting company to be excellent and I also have a direct dialogue with the Town Planner they use. The draftsman runs the process, but I have also had direct meetings with the Town Planner whenever I wanted. My project and draftsmen are in the Eastern suburbs of Melbourne.
Before using this Drafting company I engaged a different (local) company who were about the same price but impossibly slow to the verge of incompetence. I sacked this company and lost a $500 deposit and a few months of time.
PnP’s service sounded very comprehensive and might be good for people who want little or no involvement. Personally, I like the hands-on involvement.
Just my 2c’s worth…
Scott.
Sash,
How have you found Property Subdivision Group now that a few months has passed? I’m also talking with them (Robert Lancaster) about a 2 block subdivision project in Melbourne (leave existing house on front of block, and getting Town Planning, Building approval and Subdivision permit for new house at rear).
I have found them to be extremely knowledgeable and have full confidence that would do a good job.
However, my big concern is that their basic fee of $20,000 excludes all external costs like Land surveyor, Landscape architect, Engineers, energy rater, council fees, etc. A comparable quote from a local company in my suburb is about $9,000. That is a massive premium to pay for a guarantee that it will be approved.
Adam,
Your $15K costs of going solo – was this just for drafting/architect fees or did this include all external/additional fees too?
I’m budgeting about $13K for extras like those I listed about – does this seem right?
Scott.
Hi JacM,
Thanks for the replies – some interesting links.
I came across Trish Clark ([email protected]) and her company Roomfinder who specialise in renting rooms out in a house on a room-by-room basis. She posts on Somersoft.com.au as Empire.
I’ve has a few email exchanges and phone calls with her, and she’s currently looking into one of my properties in Richmond with a view to renting out it’s 5 rooms on a room-by-room basis.
I’ll let you know how things progress.
Scott.
Thanks TerryW, but I don't think it works like that.
England will calculate the tax due according to UK law (allowing me to claim as an expense the interest payments on the ex-PPRs market value), and then Australia will tax me AGAIN (not allowing me to claim as an expence the interest payments beyond the original loan used to purpose the properties). Australia will give me a credit for the tax paid in England.
To put this into context, there is $1.6million between the amount I borrowed for my 2 ex-PPRs in England and their values when I converted them to IPs. England allows me to claim the interest on this full amount as a deduction, while Austraila will not. Assuming an interest rate of 6% (in England), this will cost me about $100k each and every year in lost tax deductions.
I read in a number of ATO publication that a business needs to exist in order for payments of capital back to an individual to be deductible, and publication IT2423 says that the existence of a business is measured (in vague terms) by the number of properties ("…if rent was derived from a number of properties or from a block of apartments, that may indicate the existence of a business”.). Has anyone come across this and made a case to the ATO based on this?
Scott.
Hi Hobe,
I've just been through this myself in the last month, and this is definitely possible. However, the LTV and interest rates offered vary enormously between lenders. Do research, and you'll be fine. I suggest you find a broker who specialises in non-resident lending as they will know how to present your details in the most positive way.
Contact me directly if you would like details of brokers we have used.
Cheers,
Scott.
