[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 4, 2012 - 3:55 am

mattnz wrote:

Where do you plan to develop? Check out this site for estimated build costs http://mortgagehouse.com.au/construction/construction-costs-per-square-metre.aspx It advises 3br, 2 level brick veneer townhouse, including allowance for common property, medium finish $1,480/sqm

Very handy website thanks for that. Although I'm not sure whether Mortgage have inflated the prices slightly, it just seems a little too high, but I'm no expert so might need to get some proper quotes.

Thanks again.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 4, 2012 - 3:50 am

Melbourne suburbs, approx 30k from the CBD.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 4, 2012 - 3:23 am

Thanks Terryw, sounds good much more clearer now.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 4, 2012 - 3:12 am

Really? that sounds far too expensive, based on your calculations of 1500+ per sqm it would roughly cost about 300k for a 21.5square double story unit. That sounds a bit expensive? I'm not a builder myself so some help would be appreciated.
thanks

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 3, 2012 - 11:03 am

I am accountant in the area of financial reporting and we are governed by the Australian accounting standards board and per the aasb we are allowed to capitalize interest on costs such as interest. Can interest be capitalized for property development by tax legilation and form part of the cost base? Thanks

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 3, 2012 - 10:57 am

Can someone please explain the difference between having a company setup to be the trustee of a trust as opposed to having myself as the trustee of a trust which will be used for purpose of subdivision and land development.

Thanks

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

March 1, 2012 - 9:18 pm

Diffinetley a good idea. Are project managers accredited by any body or institution so that I may get in contact to find one.

Thanks again

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

February 29, 2012 - 8:03 am

Someone mentioned above that approx 90% of homes build before 1980’s will have some asbestos.
I have recently got a house and nowhere in the contract does it state it may or may not have asbestos. My plans are to knock it down and build over the land, anyone know of some prices i should expect to deal with potential asbestos and demolition?

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

February 28, 2012 - 8:39 am

Really, this is new to me. I can see the logic that CGT will not apply if you buy land and develop, however what if you buy land with a house on it and then subdivide, build and sell.

Will CGT apply under this scenario? Obviously it is more beneficial if CGT did apply.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

February 28, 2012 - 8:34 am

If you do not use the margin scheme or wasnt included in  your contract of sale, does this mean that the credit which would ordinary be available for the cost of land (i.e 1/11th of cost of land) will not be available anymore?

Also my understanding is as follows:
Use of margin scheme –
I.e. you buy land for 500k, develop units and sell total number of units at $2m.
Margin = 1.5mill therefore GST = 1.5/11 = 136,364
Now although this is required to be remitted, you can claim further GST credits from the cost of developments, consulting, and demolition etc… Therefore net amount required to be remitted could be potentially much lower i.e. 20k.

Am I on the right track?

I am reading this document – http://www.ato.gov.au/content/downloads/bus70665nat15145072010.pdf

From that I cannot tell what the case would be if one does not use the margin scheme, however its good source to understand the margin scheme in plain english.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

February 28, 2012 - 7:34 am

Yes I will seek professinal advise thanks

However before I do, would you know from what time period you are classified as owner for 12 months purpose (50% CGT); i.e. settlement is likely to be for example October 2012, building is likely to take for example 9 months on 5 units. Do you suggest to be able to gain the 50% CGT benefit to hold onto property for say 3 months and only incurr borrowing costs at residential rates on land value and then start building 3 months later to have it completed and hopefully sold just in time for expiry of 12 months ownership?

hope that makes some sense.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

February 28, 2012 - 2:48 am

I am considering developing 5 units on a single title. All are three bedders with 2 car garages in a suburban location. I have been advised that big 4 banks will only consider 3 or 3+ unit development as commercial and consider rates at approx 11%.
This does not seem reasonable to me as the property will be secured anyway.

This is also my first project and we have little assets to back it up so technically I would be relying on a very detailed and thorough forecast with independent valutions to support this forecast of likely profitability. What are your thoughts on this? What method do you guys think I should consider.

[AALLIIParticipant@aalliiJoin Date: 2012Post Count: 37]

February 28, 2012 - 2:21 am

I'm interested in this too, any help would be appreciated.