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Quite easy. Should be drawn up properly so each party is aware of obligations as well as being protected. Can also be secured if necessary.
regards
D
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Hi Harry
I agree with Richard
We recently priced up something similar for a client. Don't forget that you are creating an additional lot so will also trigger infrastructure contributions. 2 Bed in QLD would be up to $21K, legals to get consent of all the owners will not be cheap, best part of $10K and that is if you can get consent. You may need to give them some financial incentive to do so, what benefit do they receive in agreeing otherwise? Then you have to do the fire rating, carparking requirements, private outdoor living space.
If you are holding it as investment, then you well get 2 lots of rates and 2 lots of body corp fees.
Seems like a good concept at fist instance, but then once you list all your costs not so much.
regards
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Most clients I deal with use a project management entity that has no assets to do the development. If you are getting builders to do it all then much less likely you would do that then if you were actually managing subbies etc.
You should get specific advice.
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I agree with Terry. I think that your Trust may actually be invalid at common law.
Setup a Trust in Australia through a lawyer and it will be properly done.
You could also get a Binding Financial Agreement done with your partner to restrict her assets to the trust. She would have to agree, it would have to be done correctly and she would need to seek independent advice. Your solicitor would also have to be comfortable that the advice she received was sufficient. Even then they help but are not necessarily bullet proof.
We have recently decided that, due to the terribly setup online trust and companies we see all the time, we are going to do trusts with company as trustee and basic advice as a service rather than an income stream ($1000 including outlays). As a boutique commercial firm , we are obviously not doing this for the money, especially when ASIC fees are over $400 alone. I see so many poorly established structures where people have tried to setup online to save money. We would rather make minimal money on the structure setup and spend our time helping people make money in their ventures, and build commercial relationships going forward, than trying to fix the structural problems later on.
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John Pappas in Brisbane looks after some clients of mine who are builders and also investors, he is all over it.
(07) 3299 5594
D
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IMHO you would be better off finding advisors who deal with options.
Brokers and solicitors on here have used options themselves, I am sure there are accountants and other professionals who have also.
regards
D
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Hi Graeme
AD Civil 0407037001
They do a lot of demo work for my clients and always seem to come in at a good price. Never heard any complaints
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I used to own a block of units there. Interesting tenants to say the least.
Have a look at pdonline.logan.qld.gov.au and search the site you are looking at. That will let you know about flooding and waterway corridors.
D
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You would effectively have to sell your properties to a DT. CGT on the sale, stamp duty on the purchase.
We setup up DT's every day of the week. However they are easy to stuff up so you need to get it right.
Ongoing costs are $200ish per year in ASIC fees for the corp trustee otherwise it is only accounting fees.
Overall structure is vital.
regards
D
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Hi MM
Stamp duty will also be payable on the value, not the price you actually paid.
Either way can be structured by a good property lawyer.
D
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Good advice as always Richard.
Some Marketeers try and come across like they are there for you. Check the disclosure contract on the statement and you will see $30k or so going to them for selling the property. They are NOT there to help you.
I am litigating on behalf of numerous clients at the moment who have been done by some of these marketeers. One very common thing in the client statements is the buyers having to tip more money into the deal because the bank vals don't stack up, strangely enough by the val often comes in to be at least the commission amount lower.
Barge pole.
If in doubt, get them to draft a contract for your offer, the accompanying disclosure will have to outline the marketing kickbacks (in QLD) anyway.
D
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Hi Brad
Congrats on your success thus far.
Unfortunately there are also land tax issues to consider in some states. Eg in NSW a disc trust has zero land tax threshold, whereas in Qld it is $350k (unimproved value, as per the rates notice).
If you are not buying in NSW then I am a huge fan of discretionary trusts for holding property. Flexiblity and asset protection are outstanding in this structure. NSW a unit trust can provide some flexibility and be transferred to super later in life.
You are right to want to pay the minimum tax, the Govt wastes so much of it I don't want to pay a cent more than I have to.
Where you are based is not as important as what state you intend to buy the property in.
D
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Ipswich has a history of going up and down a lot more with the cycle. I can remember $30k houses there when i was paying $170k in Brisbane, then they were $300k there and $400k in Brisbane. A mate of mine bought one out there for $70k, sold it 5 years later for $60k and then it sold for $300k a year or so later.
If you can hold it and you think there will be another upswing then you may want to wait to then. Unfortunately I do not follow the market out there so can't help.
D
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Lee & Lee have a chermside office and also a Sunnybank office. Tony Lee has done a lot of property stuff himself over the years and also works with a lot of developers and investors.
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Second Lee & Lee
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Ok. I do not see any houses around Brisbane for $300k. Ipswich or Logan yes there are plenty.
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Hi Matt
Is that for a unit?
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No Rule against perpetuities in SA so lucky you, or lucky grand children anyway.
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Afraid so. Must be used by a household group. Table 5.2.16 of the planning scheme from memory.
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Use of discretionary trusts offer numerous benefits including:
1. flexibility of distribution of income
2. efficient tax planning
3. succession planning
4. Asset protection
Downsides include
1. lack of negative gearing if required
2. no land tax threshold in NSW.
There are more on both sides.
It is important that you surround yourself with experts who have been there and done it for themselves and then learn as much as you can from them.
3 key people
1. lawyer
2. finance broker
3. accountant
D
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