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Buying and selling in Land releases

Discussion in 'The Buying & Selling Process' started by Lincsus, 20th Nov, 2015.

  1. Lincsus

    Lincsus Member

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    I have got a plan which sounds reasonable to me. I am planning to buy land off land release in Melbourne North/West. The settlement is more than a year away. I plan to sell the land before settlement. I am pretty sure that there are some things I have not considered. There were a few things on which I am not very clear on.

    1. If I sell before settlement, do I pay stamp duty?
    2. Does the developer usually have any problem with the buyers reselling land?
    3. Is there a fees I will need to pay to the developer for getting their permission to onsell?
    4. With the profit (if any) subject to capital gains rebate of 50% if more than a year passes between the original contract and the new contract?

    Can any of you please clarify these issues or point out some things I need to take into account.
     
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    What if the land is worth less than what you agreed to pay for it, when you come to sell?
    1. Yes
    2. Sometimes - read the contract
    3. No
    4. Dunno
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I agree with Alan

    4 - if on capital account yes. But sounds like the land may be trading stock so no CGT, just income tax.
     
  4. melbournian

    melbournian Well-Known Member

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    I have done something similar before (not land) when you purchased put it as "Alexander and/or nominees". Then depending where it is, it takes time maybe 1.5-2 years to get titled. No, you do as you wish. Get your lawyers to sort it out on sale (developer won't care as long as they get their money). personally i think gains will be minimal and you're better off building unless your lot faces the lake or has like some superior landscape which you go as an early bird pick.
     
  5. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    If you buy as "and/or nominees" in NSW you are up for double stamp duty.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  7. wombat777

    wombat777 Well-Known Member Premium Member

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    I believe some estates have requirements for construction to start within X months of settlement. There are possible additional costs/penalties if you find yourself unable to sell and you aren't intending to build. Carefully check contract terms.
     
    S.T likes this.
  8. teetotal

    teetotal Well-Known Member

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    Check developer's guidelines. Some of them don't allow reselling land.
     
  9. Lincsus

    Lincsus Member

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    Thanks for the responses. The developer concerned in my case does allow reselling and has guidelines for construction start within 2 years. If the land values rise, I will try to sell before construction. If however, the market tanks in the meanwhile, I will go ahead with the construction and hold the property for long term. I am prepared for both the scenarios. Thanks again for your inputs.