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Agreed. Terry is all over it. Great contributor to forums
RPI | Certus Legal Group / PRO Town Planners
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You have been on this forum longer than me hey, are you SS also?
D
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Hi Michael
No worries and likewise
D
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Also have a look at your structuring overall. Different entities work for different purchases in different states. Also you may find an entity more flexible in the future should there be a change in one partner's income. Small outlays on setup can be more than made up for in taxation savings on a sale if you ever need or choose to sell in the future.
Asset protection is also important.
See an accountant regarding taxation implications
A Lawyer regarding structuring
regards
Darryl
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Our inquiry level is through the roof in the planning practice compared to this time last year, and real estate agents I talk to are busy.
How this pans out is more for the Terry's of the world
D
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I thought you meant Terry W
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Hi Mick
This is what we charge at the law firm
$1235 for SMSF trust and Corp Trustee and advice
$1235 for Bare Trust and Corp Custodian and advice
$595 for Related Party Loan Agreement and advice
Prices vary greatly depending on whether any advice is included and also some accounting firms heavily discount the way in , in return for getting the ongoing admin work each year
Darryl
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Hi Terry
Not good. I have seen some shocking advice given to people.
How does buying the your house in the company that also owns the business and then renting it from them sound.
It is when you are dealing with liquidations, administrations and bankruptcy that you really see the benefit of asset protection advice.
Any chance you could offer some wisdom in my thread on innovative business structures that is on that other forum. Would love to see what you have to say.
regards
D
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Ditto what Jamie said
Especially if you are look at the succession side of things, that is an area that Terry W is right into.
D
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USE A COMPLETELY SEPARATE ENTITY
I have 2 clients at the moment that are under external administration and them not using separate entities for business premises has cost them a fortune, one example below. I am rather opinionated about this but that has come from having grown men crying in my office because they have lost everything they have built up because of either bad advice or, even worse, they had good advice and ignored it to save a couple of grand on the way in. It is definitely worse for the people who were told and tried to save money as they know a big part of their loss is due directly to their own actions.
Example
Client's successful business owned through Pty Ltd that also owns the premises. Client has never missed a loan payment, (this bank is divesting some of its commercial loan portfolio and is revaluing a lot of properties at present) but bank has revalued the premises and it has decreased and therefore breached the the loan covenants. Bank sends a letter and says you are in breach you have 14 days to refinance the loan or we put you under administration. Premises value is down and can't refinance in that time (loan on premises is $7m). Administrators sent in. Administrator fees are clocking up fast, Business owner who built this up from nothing is now trying to find external funding to buy just the business (his equity in the premises will be gone through fees) from his own company. He may have to walk away completely and be left with the crumbs after everything is paid off, the bank gets their money, real estate agents fees, administrators fees etc. Had there been separate entities only the premises entity would be under administration and his business would be fine.
I would NEVER NEVER (unless you are looking at being a listed property trust) use anything but a stand alone entity for each commercial property. Depending on the owner/controlling situation depends on the type of situation. You can cover any sort of arrangement through related party loan agreements etc if structured properly.
I go further and recommend that you utilise an overall structure, with your equity sequestered in a non trading/non-investing trust or then makes secured loans to other entities. If not set up properly it provides little protection, if setup properly you can go personally bankrupt and still come out the other end.
Darryl
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Cheers Richard
Having you as a client would prove very educational too me Thinks
Darryl
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No worries. i have had it for age, others may as well get some benefit. D
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Not so far. It is supposed to be quiet this week and I have been hammered. Great start to the year, hope it keeps going.
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Jamie, great minds think a like , I recommended Proogle go see Terry W on another forum, but I beat you by a couple of hours.
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Hi I
I have done DA's for 3 this week.
Another I put in just before Christmas in Holland Park was sold off the plan, 1 lot on the first day, 2nd lot on the 2nd day. No approval yet and crappy old house still sitting on the block. $329 a lot taken at listing price, no views, nothing special about the blocks, in a Cav Rd High Catchement which is one of the best public Highschools in Brisbane.
Some of my clients only split build and sell. 1 who has been doing it the longest does nice houses, costs him 525K a house to build each house, plus the land and splitting costs. He has managed to get int the 1.1 -1.2 million a house for the last 2 of them, 1 in Greenslopes/ Coorparoo border, one in Camp Hill
It can be done, definitely.
regards
D
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Hi
Is it LMR 2 storey or 3 storey
Have you checked out if the neighbourhood plan changes anything
My clients have been buying around the 150K a site for middle-outer stuff like Zillmere
Infrastructure charges 18k per 2 bed 26k per 3 bed, 1 credit for the existing lot
Town planning fees $3600 plus GST
council app fees $5205 – $7690
Surveying $2-$5k
Design $5k
That is your costs up to approval (although IC's can be paid later)
Construction costs need to come from someone else, PM me the address and I will let you know what area it is in
D
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Second that
Andrew is outstanding
D
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PS
forgot to mention that you need to use a different trust structure for developing than investing. If you utilise the same it is likely that you will be classed as a developing business and that you will not be eligible for the 50% CGT discount for investments held longer than 12 months.
Use of unit trusts v discretionary trusts will depend on your situation as well as the state land is held in. Sometimes a company can make sense as the developing entity, again depends on your personal situation.
regards
Darryl
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Hi HKR
I would normally recommend a multi-layered trust structure to get you setup initially. And then you utilise a separate trust structure for developing to that you would use for investing.
For Asset protection, the multi-layered helps protect your money. So you set up a trust that does nothing except for hold the equity you gift to it and then it provides loans to other structures via registered second mortgage. Proper advice is essential so that varies entities are not regarded as merely your alter ego. An accountant is not legally able to provide you with asset protection advice, so see a lawyer for that. Accountants can advice on the taxation considerations as well as tax lawyers It is a great idea to find both a great lawyer and a great accountant with property experience.
regards
Darryl
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Hi P
Unfortunately the property is outside the sub precinct of the neighbourhood plan near the train station that would have allowed 3 storeys.
However, the neighbourhood plan encourages units and townhouses for elderly people and students near centres such as the train station.
My Map measurements show the property to be just inside the 400m walk from the pedestrian entrance of the railway station.
I think you would have good prospects of getting approval under the new City Plan 2012 for any of the following:
Duplexes
2 storey units or town houses
up to 900m2 of building plus semi-basement parking (max 1m above ground level)
The actual area of building may be reduced after assessing the boundary setbacks
Under the existing City Plan 2000 would be much harder but possibly
2 storey units or town houses
Up to 500m2 of gross floor area
You would need to write the application and target the design for either elderly or students.
Hope that helps
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