Buying and Subdividing in Sydney

Discussion in 'Development' started by virhlpool, 14th Jan, 2018.

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  1. virhlpool

    virhlpool Well-Known Member

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    Hi all.. I am exploring options to buy a vacant plot OR one with damaged/ old property in Sydney that we can knock down, subdivide the plot and build two smallish houses/ townhouses on it for my family members (both properties will have separate ownership), as close to CBD as possible. Total budget is flexible but less than say max $1.2M-$1.4M inclusive of house price, re-building cost and other costs involved. These will be ideally PPORs but if they are too far from CBD, then we don't mind considering them as IPs.

    Due to budget constraints, I don't have a specific minimum plot size in mind though it will need to be at least above the size limits for the sub-division permission set by councils. Also, we are happy even if we can build only 2-bedroom houses for now and later add more rooms if space permits. Since both houses/ town-houses will be of my family members, there'll be more flexibility in terms of size of the houses, design, and therefore budget. I have a few queries. I will appreciate if some experience people can help!

    1) As usual, the ideal suburb/spot would be with amenities, transportation and decent schools nearby. I am looking for older, established suburbs. Considering the density norms of council and going prices, which suburbs would be ideal for this price range and which kind of land sizes should we be looking for?

    2) Can someone recommend BAs or developers who specialize in sourcing this type of properties who I can reach out to?

    3) Should I start looking for this type of property already or wait for market to slow down further? Since there's no rush, ideally I would go for the most run down property possible to knock it down as chances of getting the vacant land plots in established suburbs are pretty bleak. Any tips for sourcing / negotiating for such properties will be appreciated.

    Thanks.
     
    Last edited: 14th Jan, 2018
  2. TAJ

    TAJ Well-Known Member

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    Why Sydney? You may want to read the Thread " Moving for a better quality of life".
     
  3. virhlpool

    virhlpool Well-Known Member

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    Thanks! Sydney, because I intend to live in Sydney for next 5-10 yrs at least.
     
    Last edited: 14th Jan, 2018
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    You might consider something that you can buy a house to refurbish and add a granny flat for that budget. Suggest Blacktown council area. Anything subdivisible will find you stretched.
     
    Last edited: 14th Jan, 2018
  5. virhlpool

    virhlpool Well-Known Member

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    Good idea.. we would be looking for two similar sized houses/town-houses though so knocking down a very old property would probably be a better option so that we can build two smaller ones instead.

    Which suburbs in Blacktown council do you recommend given above scenario?
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    @datto or @skater may be able to shed more light on the area than myself.
     
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  7. datto

    datto Well-Known Member

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    Sorry Virhl, I don't think too well at this hour. I'll check it out later in the day.
     
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  8. Gockie

    Gockie Life is good ☺️ Premium Member

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    I always thought with my North Epping home (788sqm) that it would be good to put a duplex on it. The land was fairly wide (17m). Only problem for you though is any property you buy in that suburb is going to cost a minimum of 1.3m already.

    What im thinking in this scenario, is buy the home, live in it, (ensure it's a configuration that can cope with 2 separate households/families - either side by side, upstairs and downstairs or a main house and granny flat) and after 10 years do the duplex build (since then you probably will have paid off a lot of the debt)

    Note, we never went ahead with it though. Even though I wanted to do this (there's a tax strategy where you live in one half, sell that and then live in the other half and it's all still CGT free), my partner would not want to do it, and you'd have to live elsewhere while the build went on.

    Edit: a maybe slightly helpful thread
    Dual Occupancy without Subdivision
     
    Last edited: 15th Jan, 2018
    L3ha7 likes this.
  9. skater

    skater Well-Known Member

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    It will work in any suburb......so long as the price is right.
     
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  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I have tax qualifications and dont agree with that view so take care anyone who read that that its likely to be wrong. It relies on a factual error in what a main residence is. Its also likely a GST concern :eek: and not even subject to CGT but ordinary income tax.

    Issue is partly explained in TD 92/135 in a very over simplified example. The other part unexplained is that you cant be resident in two homes at once. And a subdivided duplex doesnt meet the adjoining property test. Taxpayers who seek to make money from an isolated profit making intention may not even have a CGT asset if its used as their home in such a case.
     
  11. KinG3o0o

    KinG3o0o Well-Known Member

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    sorry to be the one who brings the bad news. not sure why no one has told you this.. but not possible. even if sydney market drop another 10-15%.

    at 35-50 km away from sydney you might have a chance if you look close enough.
    but im not sure if you are around 40km away from sydney you are still considered to be in sydney ?
     
  12. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Could be right if the properties are sold at a loss!
     
  13. Gockie

    Gockie Life is good ☺️ Premium Member

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    Cheers. It's a "I heard it on a grapevine a long time ago" thing. And I am not an accountant, and I cannot give tax advice.
     
  14. virhlpool

    virhlpool Well-Known Member

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    Yes, considering that buying a single villa/townhouse (old) for myself might be a better option since they seem to be fitting in $700k-$750k budget in some suburbs though farther than where I would want to live.
     

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