Browse Forums Building A New House 1 Feb 04, 2011 3:59 pm Hi, I am new to this entire process, so please excuse me for any naivety or silly questions. I've done research, and understand the basic process and costs involved, but am still unclear on a few matters. At the moment I am renting, but an excellent opportunity has come my way to aquire a block of land and build a home on it. My uncle and aunt own an investment property in Klemzig which they are currently renting out. It's on a corner block. The land is rectangular, approx. 600m2. The house on it sits a few metres from the footpath, and the backyard is quite large. Essentially, the current block could be sub-divided in half. Therefore, a new lot of approx. 300m2. They have offered I buy this land from them without a bank loan, and pay them off on the agreed price on a weekly basis... (Very happy ). However, I have to arrange and organise the sub-division. This is where I'm lost. Where do I start? The current block of land is in their name, and the the plan is to sub-divide it so the new lot will be in my name. Will my uncle and aunt have to start the sub-division process because it's their block, and then once sub-divided get this new land under my name? Or can I sub-divide on behalf of them? What needs to be done to get the land under my name? Now, the next part refers to the first home owners grant. As I understand it, the grant for someone who intends to build a new residence is $15000 (first home owner grant $7000 + first home bonus grant $8000). Just out of interest, under my circumstances would it be possible to use this grant to aid in sub-division costs? Or is the grant only applicable to actual construction? Finally, what about stamp duty? When does that come into play? As I'm building a new residence am I still required to pay some form of stamp duty? Thank you for any help Re: Adelaide - Info/help needed for my sub-division process 2Feb 04, 2011 4:18 pm Hmmm... better check a lot more stuff before you get all caught up. These are a few of the areas I would be checking: CGT, legal entitlements/issues, Moiety Title??( not sure) Dividing the land will be time consuming and costly. CGT will be triggered and even at 'arms length' you will(someone) will be paying tax on the full value of 1/2 the land. Is the site deep sewered? If not then I predict a large cost to remove and reinstate. The ATO has a lot of info about these types of 'agreements'. No doubt a few people here have a better clue than I I have only started the questions and some one will probably haul me over the coals... for being a grano not a legal eagle or an accountant. Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 3Feb 04, 2011 4:44 pm Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 4Feb 04, 2011 4:49 pm Took me 11 weeks to find out if it was even possible to split 1100sqm inner suburb Perth into two blocks and needed power of attorney from owners exectuter of the estate to process as was not in my name and i didnt want to buy it if it wasnt going to be possible. Demolition was $12k but all up with a further 6 month wait from all the appropriate agencys cost $40k excluding interest during this time. There are surveyors that can handle the process on your behalf but they will want more for all the coordinationg and phone call waiting to all the different departments. Surveyors the place to start. And a good accountant will be needed to go thru the tax and some of the legal if what you propose is even possible. Good luck Timeline Aug 08-Land Mar 09-Demo/Titles Sept 10-Handover No1 Sept 11-Handover No2 April 12-Sold No2 Aug 14-Land/Demo Jan 15-Slabs viewtopic.php?f=31&t=25736 Re: Adelaide - Info/help needed for my sub-division process 5Feb 04, 2011 5:05 pm If council allows 300m2 lots and you divide down the middle,it may not be to costly.You will need a land surveyor who should be able to get :Town planning report,:survey of site,Proposal &site Analysis,:Plan of subdivision .If services[power water etc] are on your side of road it will be cheaper to have the services conected.I would talk to council first,take it from there good luck.I have done a 3 one acre lot subdivision in vic. Re: Adelaide - Info/help needed for my sub-division process 6Feb 04, 2011 5:11 pm Pattycake - Do you remember how much it cost to split the title? On your land... How long did the process take? How many departments did you have to traverse? Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 7Feb 04, 2011 5:20 pm I did my own got forms from titles office and booklet,If you had a solicitor I think it would be about $1200 I wouldn't think anymore.To get planning permit I had a Consulting firmCost was $5000 plus council fees approx $800 Once you have permit then you have ti have services connected etc mine was costly as they were on other side of road that cost approx $30000 hope that helps Re: Adelaide - Info/help needed for my sub-division process 8Feb 04, 2011 5:30 pm Dept of land $1400 just to apply Council $1K Lawyer $1K Water Corp $6500 for sewer run in and they dont do the work so a plumber additional $1.5 K Power Company $1500 for pit Gas Company Nil Surveyor $4K Settlement Agent $600 Bank $ depends on what you need to borrow if applicable Dept of planning and Infastructure $ cant recall plus I paid $10 K for a driveway but it was a rear battleaxe type of subdivision. Timeline Aug 08-Land Mar 09-Demo/Titles Sept 10-Handover No1 Sept 11-Handover No2 April 12-Sold No2 Aug 14-Land/Demo Jan 15-Slabs viewtopic.php?f=31&t=25736 Re: Adelaide - Info/help needed for my sub-division process 9Feb 05, 2011 8:38 am Thanks guys for your help. What about the first home owners grant? Can this money only be accessed once construction starts or is approved, or can I access this money to be used for sub-division purposes? Another thing in regards to stamp duty. When building a new home you only pay stamp duty on the purchase price of the land. Now, I'm not going through a bank to get a loan to purchase this land. My uncle, aunt and I will agree on a price between ourselves, and then I will start paying them off weekly. Say we agree on $150 000. So how does this work with stamp duty? Could I theoretically buy the land for $10 000, and only pay stamp duty on that value? I'm not sure how this works... Thanks Re: Adelaide - Info/help needed for my sub-division process 10Feb 05, 2011 9:27 am Nup... market value only Did you read about the CGT trigger?^^ Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 11Feb 05, 2011 10:01 am Not sure if this applies in your states,in vic if you hold property for 12 months there is a 50% deduction on CGT once subdivision is done Re: Adelaide - Info/help needed for my sub-division process 12Feb 05, 2011 10:19 am There is not CGT on a PPR.... But the owner of the existing investment property will be paying CGT on the full value of the 'half' block. At market value. When the subdivision happens. Mrs G do you have any comment? Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 13Feb 05, 2011 10:29 am My CGT was the normal profit/outlay for subdivision then divied by 2 as 1 lot was residential no CGT.AS we are going to build on lot 2 we will only pay on lot 3 Re: Adelaide - Info/help needed for my sub-division process 14Feb 05, 2011 11:11 am Not sure I understand... So how much did you have to pay?CGT Was it you guys that actually did the subdivision? Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 15Feb 05, 2011 11:31 am yes because we did sub then held vacant land for 12 months is got 50% reduction. lot value $300.000 minus what land was brought for 22years ago and expences so tax on 150 less cost. Re: Adelaide - Info/help needed for my sub-division process 16Feb 05, 2011 12:13 pm It is a bit different to this one... ie a non-PPR, an investment property... Like i said no accountant, no lawyer ,, just that I have come across this myself. Once or twice Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 17Feb 05, 2011 12:24 pm Please please please, get your parents and yourself some tax advice. If you only pay say 10k for a block worth 300k, then the ato can apply market substitution rules, where they deem the selling price at market value not the contract value. This will cause massive headaches for your parents. State revenue may also not be extremely happy. As I said please talk to a accountant who you engage to help you with this, we see this all to frequently and it just is a mess. *this is not tax advice* ---- Building in Banksia Grove We have keys - 31st March 2011 Re: Adelaide - Info/help needed for my sub-division process 18Feb 05, 2011 12:42 pm ^^ correct Where you are coming from is where you are going to... Re: Adelaide - Info/help needed for my sub-division process 19Feb 05, 2011 12:45 pm sidewinder Please please please, get your parents and yourself some tax advice. If you only pay say 10k for a block worth 300k, then the ato can apply market substitution rules, where they deem the selling price at market value not the contract value. This will cause massive headaches for your parents. State revenue may also not be extremely happy. As I said please talk to a accountant who you engage to help you with this, we see this all to frequently and it just is a mess. *this is not tax advice* Thanks heaps for that advice. I had no idea... A 300m2 vacant lot in the area usually goes for something around 200 - 230k. Our agreed price will be somewhere in the vicinity of 150k and above. Say we agree on a price of 175k. In your opinion/experience, do the ato step into these matters quite often? I can understand if the agreed price was very low, like 10k or 50k, even 100k. I assume, however, as the agreed price rises and gets 'relatively close' to typical market values the ato will most likely not get involved...? Is this how it generally works? Thanks again Re: Adelaide - Info/help needed for my sub-division process 20Feb 05, 2011 1:11 pm http://www.revenuesa.sa.gov.au/IamaPropertyBuyer.html Start here and follow the links... you need to be fully informed about the process. Trust me It can get expensive for the seller & the buyer. If you think you can avoid paying what WE all have to pay then you are not getting the story correct. Unfortunately too many people took huge advantage of this prior to ~'84 the belt has been tightened and dept' are all linked these days.... A simple trigger sign(red flag) will pop up with SA revenue, ATO etc and I figure you will be working and living there for a while.... They will catch up if you do anything funny and WILL want to collect. Get some good advise as mention before...I was alerting you to a set of info in the previous posts... Again Not an Accountant, Not a lawyer do you self a favour and make some appointments with the ATO & SA revenue to find your financial obligations. Where you are coming from is where you are going to... Building Standards; Getting It Right! 1. optional, you can but normally just use the earth from the main switch board 2. should be enough but the distance determines voltage drop - sparky should work it… 1 28804 I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from… 11 53177 Thanks very much! And would the landscaper/contractor generally involve the engineer or is that something the client would do? Thanks for your help 2 10008 |