Forums / Property Investing / Creative Investing / Buying Land As Tenants In Common And Then Build

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  • Profile photo of new2investnew2invest
    Join Date: 2010
    Post Count: 37

    Hi All

    My wife and I are thinking at purchasing a block of land and then build as soon as it's titled. We are thinking to go in as Tenants in Common as I am on a higher salary.

    We have another property which we bought back in 2011. It  was 2 months old when we purchased it. We went in as Tenants in Common as it was already established.

    Now we are thinking of building our 2nd IP which will be slightly negative in first year and then neutral second year and then slightly positive in 3rd year. We going this way because we planning for a baby in the 3rd year and preferably we dont want to put in money into the property even.

    Regarding Tenants in Common, do I still have to put this in my Land Contract as well as the building contract.

    Not sure how it works for buying a block land and then building on it.  


    – how does it work when you buy block of land and then build – Do I need to have tenants in common on both land and building contract?

    – Since I am on a higher income it is better to split the share as 90% to 10% considering in 3 years she will be home for about a year or two?

    Thoughts anyone? 


    Profile photo of GrantMckGrantMck
    Join Date: 2013
    Post Count: 36


    Tenants in Common is noted on the Title, so when settling the land, this is where your ownership split should be noted. As far as the actual percentage is concerned (No Financial Advice Given Here on), it will really come down to your tax rates. If your wife is out of work for a few years and there is no income, another consideration may be to allocate a larger percentage to her, best person to run the scenario would be your Accountant, or a company that can complete a Portfolio Property Investment Analysis for you based on real numbers.

    Also consider completing an Income Tax With Holding Variation as this will assist with your cash flow on only one income, once again a Portfolio Property Investment Analysis will be beneficial.


    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,190

    When buying a 'house' you are actually being land with the house attached. technically the house is a fixture – it becomes part of the land. So the house is usually owned under the same structure as the land is owned.

    There are rare exceptions such as on leased land the building is often constructed and owned by the tenant.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide)

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