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We paid a 5%deposit on land off the plan in early July 2003. Supposed to settle November.In February agent rang to say deposit had to be 10%. “Values” had jumped by 25% in the interim, so it was sitting on a nice little capital gain, (462% gain on deposit) and we also thought developer must be trying to squeeze us out. Agent said, “no, it’s because his bank is requiring higher deposits in hand to continue finance”. We took the deposit back and parked it in an offset account and did a deposit bond instead.(did the calcs and it works out cheaper for us) We drive near the area on our daily trek to work, and the sitework is started so maybe it will settle by July this year!
Another option is to build a nice new home in the backyard for yourself, and sell the front one. NSW will allow you to build after getting approval for dual occupancy, so you get a construction loan which is interest only until completion of construction, then you get a tenant in for 6 month lease on your old home, and during that period organise to subdivide and sell. My local council were very helpful and came up with approximate figures for subdivision cost. Magpie
We are planning to do a similar transaction with family member who is a first home buyer, so will not have to pay stamp duty now or worry about CGT if/when she sells, I believe. Eveything I have read indicates that ATO is looking very carefully at this type of transaction and will deem value to be market value, even if you try to use a lower value. (We have to wait until the deposit she is paying off to us, allows her to get a loan she can afford. Quite a balancing act with property values going up and down)
Would suggest you get 3 agents valuations before you agree on a ‘price’ for your transaction.Check with your bank before you send a cheque, some charge $10 – $20 to clear cheques banked overseas. Also, your friends bank may charge a fee also to deposit the cheque. I currently pay an account overseas by ringing up and getting it charged to my credit card here. Perhaps you could pay for something your friend owes. Get an exchange rate quote on the day, being careful to get the correct rate, as it makes a difference whether you are sending the money or receiving it on any given day. Magpie
Have you worked out the figures as to when each of the -ve properties will become +ve. Maybe you could use some of your good income to pay extra off the mortgages for a while. Once 1 becomes +ve, then pay off the next one……until all are +ve. Alternatively, do all the calcs for each property for current and projected figures and then compare. Keep the 2 best ones, sell the other and use the net proceeds (remember CGT) to get the first two into +ve, and keep some cash for deposit for future purchases. whatever you keep, consider to fix the interest 3-5 years so you have some control over costs. Magpie
