Hi Guys,
Not to sure about this one so I thought I should pass it by you guys in the hope that you have heard of this one before. Have some deals on units from a developer, not to sure what to look out for on this as it sounds to good to be true but here goes.
The company is offering 10% rebate (tax free) off bank valuation, in other words, if the deal comes in at $400k you raise the funds and receive $40k back on settlement. One of the guys here at work is getting 3 (1.1 mil) and paying out his personal debt with the rebate. Now me being one for an opportunity I have to say that I am a tad excited but also very concerned at the same time. He seems to think all is good but on the same token, if he was that good with money why would he need the rebate to pay out his debt?
Your thoughts on this matter would be highly appreciated as I need to act fairly quickly.
Cheers.
G
Of course, you’d disclose this ‘rebate’ to the lender so as to avoid potential fraud allegations wouldn’t you?
F.[cowboy2]Hi G.
Don’t get too excited yet!
Some points to consider:
1) In this case, the developer has probably increased the purchase price so he can give a bit back to you.
2) It may be tax free if owner occupied, but if investment it would need to be taken into account when you sell for CGT reasons.
3) Will the developer let you chose the bank and valuation company or will they control the valuations – ie get a friendly one?
Valuers are well aware of rebates, and take these into account. If everyone is getting a rebate, it will probably value in at the amount less the rebate. So will they sell at this price if the value comes in lower than expected?
It may still be a good deal, but be careful with buying off the plan in this sort of market.
Terryw
Discover Home Loans
Parramatta
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Caveat Emptor (sic). If it looks too good to be true, then it probably is. The only thing you get for nothing is nothing. Exercise care especially at this time of the property market cycle..
Originally posted by Terryw:Hi G.
Don’t get too excited yet!
Some points to consider:
1) In this case, the developer has probably increased the purchase price so he can give a bit back to you.
2) It may be tax free if owner occupied, but if investment it would need to be taken into account when you sell for CGT reasons.
3) Will the developer let you chose the bank and valuation company or will they control the valuations – ie get a friendly one?
Valuers are well aware of rebates, and take these into account. If everyone is getting a rebate, it will probably value in at the amount less the rebate. So will they sell at this price if the value comes in lower than expected?
It may still be a good deal, but be careful with buying off the plan in this sort of market.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Thanks Terry,
I can choose the valuer thankfully, I am led to believe by the way the rebate is structured there is no tax payable by the letter of the law, this is in accordance with my accountant.
The stock is not the best however, it is the left overs hence the reason for the deal, they need to get closure on the project, still, not bad really when you think about it, you could either grab the 10% (40k) and go on holidays or lump it off the loan and get closer to a +cf situation.
I shall investigate further!
G
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