Browse Forums Building A New House 1 Feb 15, 2009 8:25 am Hi there,
I am wondering if anyone has some experience or rock-solid knowledge about building a duplex as your first home where you are eligible for the FHB grants of $21k Why am I thinking this? I am very keen to get started on the property investment trail and figured that if I could combine my first home with a separate investment property, perhaps I can have some cake and eat a little too. Background; Settled on large size block of land that is zoned for single-dwelling and duplex. Average rents in the area for 3 bedroom house/townhouse fetch $280-340 per week. Pre-approval to borrow up to around $500k for FHOG/FHB on the house. (Looking at spending a maximum of around $400k) Questions; 1) Is there any reason why the grant ($21k) will not be paid because we are building a duplex rather than single-occupancy dwelling? (I read the eligibility criteria from the government and it does state duplexes are valid residential homes, but it is too vague to tell if that includes building a duplex where you reside in one side and rent out the other) 2) Tax-deductibility of the interest payments on the portion of the duplex that we rent out as an investment? (this is particularly confusing because in effect, one side will be our PPOR, the other side will be an investment property) 3) Does this go all under one loan or two? i.e. One loan for the PPOR, the other for the investment property. (Planning to discuss with my mortgage broker tommorrow) The more I think about it, I probably need to talk to an expert. If anyone has advice in the meantime, it would be very much appreciated. Thanks, Emptyvessel Re: Advice Plz - First Home Build as a duplex - Tax, Loans etc 2Feb 15, 2009 12:48 pm emptyvessel,
I'm doing a similar sort of thing, except I'm not eligible for the FHOG/FHB grant. Building duplex is just like building two houses simultaneously, so there will be two separate contracts. So, I cannot see why you can't get the grant (but I'm no expert). Re tax deductability if you're living in one, you'll be able to negative gear on the investment property only. So, pays to borrow as much as possible against the investment property. Extra repayments should be directed to the home you live in. As I have enough $ to pay for one house outright, I am borrowing against the investment property only (ie one loan). Not sure whether you can get two grants if you build one house, and your other half builds the other. Not sure which state you're in, but in SA, land subdivision costs around $20,000. Chris Re: Advice Plz - First Home Build as a duplex - Tax, Loans etc 3Feb 15, 2009 1:09 pm Thanks for the advice.
We are in queensland. We are de facto, so no chance of two separate grants. Nice thought though. Now for an apparently stupid question; Do you have to subdivide to put a duplex in? Or is this only required if we decide to sell one (or both)? I can't seem to find much info on the process for duplexes. If you know of anything, please shoot me some links. Thanks, Emptyvessel Re: Advice Plz - First Home Build as a duplex - Tax, Loans etc 4Feb 15, 2009 2:14 pm Yes, you need to sub-divide to build duplex.
Have a look at my post in thread "subdividing blocks". Other than sub-division, building duplex is only a little bit more work than building one house, especially if the two houses are virtually the same. Some people choose to put a lot more goodies in the house they are going to live in. In my case, the one I'm going to live in is only marginally better than the rental. Number of other things: - Partywall is unique to duplexes, but this is transparent to me coz my builder looks after this (my builder uses hebel). - Duplexes also often attracts an access fee from builder. - Recommend that you get a stormwater sleeve under the garage. - Having a rectangular block to begin with helps. - I'm doing flooring separately from the build. Thinking about putting ceramic tiles and carpet in the rental, and ...???... in my home. I'm a first time builder and am learning as I go along. This forum helps. Chris Re: Advice Plz - First Home Build as a duplex - Tax, Loans etc 8Feb 16, 2009 8:42 pm Quote: We are in queensland. We are de facto, so no chance of two separate grants. Nice thought though. Anyone who has not owned a home before can get FHOG but only one per home ie a couple (makes no difference if you are married, de facto, same sex or what) building / buying a home for both to live in gets one grant - if you are building 2 separate homes theoretically you could get a grant each if there were 2 separate contracts for 2 separate properties, one in each of your names (even though they are joined as duplexes) , however here is the catch....... You have to live in the home for at least 12 months so you would have to live in one and partner in the other, ie neither would be able to be rented out - the loss of rental income and no negative gearing, not to mention relationship inconvenience, probably negates any benifit Re: Advice Plz - First Home Build as a duplex - Tax, Loans etc 9Feb 17, 2009 8:32 pm Yeah, no good without the negative gearing. Thanks for the info though.
I will have a chat with the council on the subdivision requirement. I read through their online documents and it says that the land is suitable for duplexes as it is zoned Residential A. I didn't find anything mentioning subdivision at all. Another couple of questions if I may; Is it possible to build and complete one side considerably sooner than the other? Or must they both be "complete" to allow you to live in one? Can I make the loan on the investment side of the duplex be a much higher proportion of borrowings than the "home" side? i.e 70% of the borrowing on investment B and 30% on home B. Even though they both may have 50% of the actual building material cost. Thanks, Emptyvessel Re: Advice Plz - First Home Build as a duplex - Tax, Loans etc 10Feb 17, 2009 9:09 pm Here is the specific code for dual-occupancy, I can't see any reason for us having to subdivide except for sale at this point.
http://www.moretonbay.qld.gov.au/CSC-Sh ... pancy_Code Although how the valuation is affected by having them on the same land title is unknown to me. If so what were the "special circumstances" under which it was granted? "Note: If the development consent is for 'dual occupancy' an owner-builder permit can only be… 0 14070 the exemption applies only to your principal place of residence - so you must live in it. The 200 days is continuous. You also have to apply for the exemption. 2 13317 If it's your primary residence then there is no tax deductions to be made. 4 125285 |