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  • Profile photo of balniksbalniks
    Participant
    @balniks
    Join Date: 2006
    Post Count: 31
    February 5, 2008 - 2:59 am

    I currently in residing in my own home that i'm still paying off. I am looking at buying a large block of land, a minimum of say 4000m2.  Once i buy this i am going to buy a relocatable house and put this on the block and live in that. Which will allow me to rent out my home i'm currently in now.  (Said house will be paying for itself in regards to the loan)

    What sort of fees would i be looking at on buying land? Is is a lot cheaper than a house? What tax/$ rammifications would i have by renting out my primary residence? Also what what i need to look out for when buying land, i know that a soil test is important, and the possibility on a subdivision in the future.

    Any help is appreciated, or articles someone may have links too in regards to this kind of endeavour. Btw i am in QLD.

    Thanks,

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 5, 2008 - 3:18 am

    balniks

    Wow before you go on any further just be a wee bit careful.

    From what you have said you will be living in the new home and intending to rent out your current PPOR.
    If this is the case remember the interest on the land and relocatable home will be non tax deductible and interest repayments will be made with after tax dollars.

    Also only the interest on the balance outstanding as at the time of you moving out of your current property will be tax deductible. You will be unable to redraw funds down and claim the interest or refinance to a higher loan balance.

    A good broker will be able to map out a way forward with you and look at alternatives to maximise your tax deductions and reduce your non tax deductible debt. Immediately i would changing your current loan to an interest loan as you dont want to pay off any more than you have to for the time being.

    The situation needs carefully planning to ensure that you have it right.

     

    Richard Taylor | Australia's leading private lender

    Profile photo of balniksbalniks
    Participant
    @balniks
    Join Date: 2006
    Post Count: 31
    February 5, 2008 - 4:35 pm

    Thanks for your input.

    Sounds like there is a bit to think about for sure.

    The house that i move into on the block of land will turn into my ppor, will this still make a difference in regards to the interest and tax?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 6, 2008 - 2:28 am

    balniks

    Yes it will certainly make a difference.

    Always suggest getting in right in the first place as it could save you a few dollars.

    Richard Taylor | Australia's leading private lender

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