All Topics / Help Needed! / Newbie – Investment pipedreams

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  • Profile photo of GarthGarth
    Participant
    @garthhall
    Join Date: 2015
    Post Count: 1
    August 6, 2015 - 1:18 pm

    Hello All,

    1st Time post

    My partner and I have a property which with worth Approx. $650k (we currently live in this property). Overnight the planning rules have changed allowing our property to be sub-divided.

    Our financial situation
    – Combine income of $180k p.a (wife earns 70k, I earn $110k)
    – Loan for $500k
    – Savings in Offset – $140k

    My Plan is too purchase another property around the $600k mark over the next 3 months while I get approval for subdivision/council etc for our property. Once approval is achieved I will demolish/build on my existing property while living in the newly brought property (which is also hopefully sub dividable). When the two houses are built I will move into one and rent the other out for 12 months, and then sell.

    I will then sub divided the new property and build on this. These will be rented out and sold off.

    If the bank lends me the money required (speaking to my broker now), Is there any tax minimisation techniques which should be used? Also who’s name should I be buying the property in? or under a trust?

    Thanks Garth

    • This topic was modified 9 years, 3 months ago by Profile photo of Garth Garth.
    • This topic was modified 9 years, 3 months ago by Profile photo of Garth Garth.
    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539
    August 6, 2015 - 1:37 pm

    Hi Garth

    If you intend to buy an investment property and THEN do your subdivision/construction, first check with your broker that the lenders would actually fund both of these exercises.

    You will find that GST will apply to the newly-constructed property. For this reason, people who do a build in the backyard of their home often opt to move into the rear dwelling and sell the front one. Discuss pros and cons with your accountant.

    Capital Gains Tax will be in play and you should discuss likely CGT with your accountant also.

    Once you do your subdivision you should expect that council will hit you with two council rates notices rather than one. For this reason, people often construct first and leave the subdivision till last.

    As to whose name to buy the property in is a question for your financial planner or accountant.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

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