Good Evening All,
My brother and I are looking to enter the property market and have our eyes on a duplex block with an old house that we plan to demolish, subdivide the land and then owner build two new dwellings.
We are looking at ways to minimise our tax obligations and maximise any government subsidies available to us.
My queries are as follows:
If we purchase the property together, are we eligible for the FHB Stamp Duty Concession (in WA)?
Also, are we eligible for 1 or 2x FHB Grants for the two dwellings? We intend to Owner Build and have foundations poured within six months of settlement (to allow time for titles to be approved).
Are there any pitfalls you can see with these plans? Are there better ways to structure this?
Look forward to your responses!
Regards,
Mimmo
Building the residences yourselves with no building experience would be fraught with risk. You would need to ensure that the buildings comply in every respect with the Building Code; be responsible for OHS on the site during construction; and be responsible for the soundness of the buildings for 6 years after construction. You would need to use qualified electricians and plumbers. I strongly recommend that you use a builder for the work.
The First Home Owners Grant applies to an existing dwelling that will be retained, or to a comprehensive contract to build a new dwelling. You would need to buy the house using your own resources, then apply for the grant/s to build the new dwellings. This is predicated by your intentions to live in the two dwellings for at least 6 months after they are completed. An owner/builder arrangement to build the new residences may not be acceptable to the FEHB who would expect to see a formal contract with a registered builder. You would need to arrange for the block to be subdivided and for the plans to be approved by Council before you could enter into a formal contract with a builder. So you will need to outlay a lot of money without any return on your investment for at least 6 months after the residences have been built.
Before you do anything at all you should seek the advice of a good accountant who could guide you through the maze you are looking to enter.Mimmo
You will not qualify for 2 x FHBG unless the property has separate Titles and you purchase one each.
Certainly you may qualify for the Stamp Duty concession as long as you meet the State requirements.
Whilst you can certainly owner build a property and claim the Grant you will need to have a decent deposit as 70-80% maximum lvr would be availble to a First Home Buyer Owner Builder.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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