In my last topic I explained that the equity in my two IPs would cause problems with my centerlink single parents payment. Someone suggested I be more creative in my thinking and get off centrelink. Well I have come up with an idea.
I have decided to sell my back yard! I have a quarter acrea block. Spoke to a RE agent who says I should get $300k for it. Almost fainted on the spot. But this money would mean I could pay out the loans on my IP’s.
I have spoken to the council who have agreed I can go ahead. But what happens now? Do i get a surveyor in to draw it up and then submit it to council? Has anyone done this? WHat sort of costs are involved? ANd are there any other costs involved when selling? (im in qld)
If anyone has done this kind of thing and can offer some advise I’d be grateful.
OH and also Im looking for a new boyfriend. Er I kinda fancy a surveryor or praps a clever accountant around june.
cheers and thanks in advance for any assistance
MillyOh I have just noticed the ‘search’ option and have seen another post about this topic which answers most of my questions cept the one about cost. Anyone have any idea wot sorta cost I’m looking at to divide my block into two titles?
Milly
Feel free to email us and i would be happy to provide you with some help.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Dont think they have a dating area on here but best of luck.
How much did you say you were worth?????$$$$$$$$
Russ.[biggrin]Hi Milly,
I,m a Surveyor.
Be careful of costs.Could involve building a driveway, relocation of services etc.allow at least $50K
Also, if you subdivide, Capital gains tax may affect the sale.
Again, be careful, seek advice from your local Surveyors!
Hi Milly,
I’m sorry that I’m not an accountant, nor am I a surveyor. I do however have a month off in June and ‘I make love like I make deals – with an iron fist!’
Kind regards,
Gatsby!Thanks STrataplan. Yes I have come to understand there are a lot more costs involved than I originally guessed. However it is still worth my while going ahead with the plan.
An iron fist you say Gatsby? ……you must have the women….er….swooning ?
Tell you one thing tho, when you start obtaining assets you have to be wary of who you let into your life. [fear] Men my age are usually divorced and broke. In any cse its probably not good manners to ask some potentional beau about the size of his er…….. property portfolio. [tongue]
Good to see you are thinking laterally with regards to centrelink.
Couple o’ thoughts
Try to think about what you should do disregarding centrelink. So often people do something ‘because of centrelink’ or ‘to save tax’ that just loses them money.
Thus, do all of your sums, ask centrelink AND a qualified accountant PRIOR to actually doing something.
I dont know much about centrelink, but I think that your ppor doesnt count as an asset, but your ips do. Thus, if you sell your backyard and pay off your home loan, centrelink payments would probably not have changed (of course, you would be out of debt and able to borrow heaps more!)
Can anyone answer this question- would it make any difference to Millys situation if her properties/future properties were in a company or trust? Or would CL be interested in this as well?
If it came down to selling, if an ip was sold, then that loan would be cancelled, and your loan on ppor would also decrease, and CL benefits would not decrease.
Can you just put a granny flat on the backyard, instead of going to all of the hassle of subdividing?
Thanks Wrappack for your comments.
Im not thrilled about selling off my backyard but there is no alternative if I wish to obtain financial independance. Borrowing money to build a grannyflat would give me another debt. I need to be able to live off the rents. Paying off the two IPS would give me income to live on and more borrowing power.
I will get proper financial advice tho. I can already feel procrastination creeping when i think of some monstrosity built out my backdoor.
Milly
Just thought you may like to know that http://www.rsvp.co.au is probably a better forum for making new contacts.[blush2]
All the best with your ventures in both fields.
Catchya.
Too big it is not. Think, you must not.Want, you must not. Do you must. (Yoda)
Millie, may I suggest you consider applying for an ABN as you need that when you go for a No Doc loan.
Pisces
It sounded from your last post that when you sell (either ip/backyard), you will pay down your ip loans. Dont do this!
Pay any extra money off your ppor, as this is not tax deductable
Originally posted by OutbackJack:Milly
Just thought you may like to know that http://www.rsvp.co.au is probably a better forum for making new contacts.[blush2]
(Yoda)
Hey I can garantee that it works, met my missus there 5 years ago, still together.
Milly, if you are on PPS, you can be tested on asset or income, according to the test that allows for the lower payment.
Asset test for homeowner, single, for full pension is $149.500. Assets over thise amounts reduce pension by $3 perf/n for every $1000 over the limit.
This is the net asset, so if you owe money on the IP this is taken off.Income test for single pensioner: full pension payable if income below $120 + $24.60 per child under 16, per f/n.
Income over this amount reduces the rate of pension by 40 cents in the dollar.Some considerations:
Pay your own home off, leave all the debt on your IP, since asset is net, any money owing is taken off the value of the asset.
By subdividing you are increasing your assets, something that may preclude you from recieving any payments at all.
Subdividing is a very expensive exercise and for that you may need to borrow against your own home. This action will make that part of your home will now be asessed as asset, or part of your purchse will be considered an asset even if you owe the whole ammount to the bank.For example: If you have your own home paid off, it is worth $300,000, and you purchase an IP for $240,000 using your home equity as security, Centrelink will apply this formula.
Mortgage $250,000
IP Value $240,000
Home Value $300,000250,000
_______________ x 240,000 = 111,111
300,000+240,000This means that the mortgage of 250,000 from the new IP will be considered only 111,111 so your new assessable asset is now 240,000 – 111,111 = 128,889 as opposed to zero.
I suggest that you get an accountant to do the sums for you and that you then visit your local Centrelink and make an appointment with your FISO, financial information service officer for some further clarifications.
May God bless you
and prosper you.
MarcThanks Marc for the interesting figures. I really believe I need to take the opportunity to get off Centrelink altogether.
I only owe about 20k on my PPOR. I have IO loans on the 2 IPS of 270k (which are now valued at about 420k) By selling the backyard I will reduce my debt substancially and can live off the rents.
This also means I can borrow again to build a duplex on some land of my fathers. These will be +geared.
I was lucky enough to be left with a valuable PPOR (the advantage of bein widowed instead of divorced…..ya get to keep all the assets). I just have to figure the best way to use it to achieve financial independance.
oh and thanks guys for the rsvp link. I believe I will concentrate on property investment for the time being tho. [biggrin]
OH and also Im looking for a new boyfriend. Er I kinda fancy a surveryor or praps a clever accountant around june.and then
the advantage of bein widowed instead of divorced…..ya get to keep all the assets[confused2]I have seen Freudian slips before but this tops them all[blink]
Marc
Now marc what on earth are you implying?
hehehehe (evil laugh) [evil4]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
Good call magpie.
Milly, the advantage in magpie’s suggestion is that if you sell off your current house and move into the new one in the ‘backyard’ it will be CGT free. You might be able to sell it and lease it back from the owner for 6-12 months while building the new house if you need the money to do so.
Re Marc’s comments – I’m assuming your ‘advantage’ of being widowed was said somewhat tongue in cheek?
Cheers
Melmmm thanks for the idea mel and magpie. It sounds very sensible. However shifting from my home is out of the question. I get a terrible pain at the very thought.
and er yeah mel i do have a nasty black humour which is hard for some people in real life, let alone in print![blush2]
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