Broadly – very broadly speaking – what are the steps needed to redevelop an existing home site – possibly for selling off the plan?
Preliminaries:
1. Have site assessed by architect, builder, agent, and ?
2. Speak to local council – is site likely to be allowed to be redeveloped into two new residences.
3. Have plans drawn up
4. Seek council planning permission.
5. Sign up selling agent
6. ?
Initial costs to consider:
1. Building permits
2. Plans
3. Conveyancing
4. Legals
5. Selling agent/advertising
6. ?
Clearly I have no idea about this. I suppose I am wondering about what kind of sums a porperty owner needs to do to consider if a site is worth being redeveloped and whether there was a profit to be realised at the end of it all?
There's bound to be a thread here somewhere selling off plan/redevelopment for dummies – I just can't find one basic enough..LOL!
B x
hi Bronte,
did you get any replies to your question? I too are looking into this.
thanks
Daveyou need to talk to the council to get cheap advice about the "possibility" of subdivision. You need to download the developmental plan from the council as the minimum size of block, the zone, how many dwellings etc.
You probably need to engage an independant town planner (the local one preferred) to seek their advice and plan.
Then surveyor review for subdivision etc.Submit the documents for review at council meeting (can take months) therefore preferred to engage local town planner that know that they are doing etc.
Hi Bronte (and Dave),
This is a broad question!
There are of course many, many variables, some pitfalls to avoid, and potentially significant financial rewards.
Here are (some of) the things you must do:
1. Assess your property and idea (or have someone assess it for you) to determine if you're barking up the right tree!
2. Create a strategy for your proposal – however simple it may be.
3. Put together some concepts you can use in explaining your proposal to council and other stakeholders (for example, to get early support from your banker)
4. Turn these concepts into a formal application for a TPP or DA.
5. Assuming your application is ultimately successful, turn this information into the technical information (working drawings) required for a building permit and for the builder to work from.
6. Build (and sub-divide) according to these plans.
7. Realise (sell) the property, or move the tenants in.This is a simplified summary of what's involved.
Best of luck in your endeavours.
Hi all
we own our own home outright( no finance/ yea) in Camberwell Vic and want to develop two townhouses on the block,We are at the stage of designing the townhouses and are concerned about the TAX implications on the development.At what stage do we loose our tax free status on the land, after we have demolished the existing house that we live in or when we subdivide the block into 2.How is the development taxed after we sell one of the property’s / we will live in the other for 12 months.
thanks Sinkerssinkers wrote:Hi all we own our own home outright( no finance/ yea) in Camberwell Vic and want to develop two townhouses on the block,We are at the stage of designing the townhouses and are concerned about the TAX implications on the development.At what stage do we loose our tax free status on the land, after we have demolished the existing house that we live in or when we subdivide the block into 2.How is the development taxed after we sell one of the property's / we will live in the other for 12 months. thanks SinkersHi Sinkers,
I am certainly not a tax expert or accountant so I can only speak from my own personal experience. It's my understanding that the basics of what you are proposing is that you will be creating two properties (and titles) from what was once one title.
With this in mind, there needs to be a value ascribed to the land both before and after sub-division. This is important later. It seems you are proposing to develop two new dwellings, and sell both – although you intend to live in one for a year. If your intention is to retain one of the properties as your PPOR then this should remain CGT exempt.
The structuring then becomes important. Thinking in entity terms, you are proposing to sell half of the land and keep the other half. Theoretically, half of the land can be sold in accordance with the proposed plan of sub-division and contingent upon the registration of the sub-division.
So I would suggest you need to be clear about the intentions, and thus your strategy, and then seek property accounting advice to ensure your intentions are satisfied. If you are sub-dividing and selling for profit then the ATO would probably determine you are not investing but actually trading – you are a business. This then means there are also GST issues to contend with, along with reporting requirements. There are well established benchmarks for this and I have also found lots of useful advice on the ATO web-site.
What you are proposing is not particularly unusual or complex, but it is worthy of full consideration and quality tax advice.
Good luck with your project.
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