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Buying Land

Discussion in 'General Property Chat' started by Luca, 13th Feb, 2016.

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  1. Luca

    Luca Well-Known Member

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    Hey guys, what do you usually check before buying a lot? Also what are the costs involved in terms of taxes / benefits? Sort of seen of good opportunity and didn`t have much time to correctly evaluate all the potential risks...but don`t want to miss it out too. The only additional cost that I am aware of is the Conveyancers.
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    There's stamp duty

    Cheers

    Jamie
     
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    You'd want to check things like:

    - Easements
    - What/when you can build on it - ie whether it has a design code, encumbrance, zoning
    - Whether you have enough borrowing capacity after buying the block to be able to build
    - Whether the combined cost of the block and the construction is in line with what the value of similar properties in the area are.
     
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  4. Luca

    Luca Well-Known Member

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    Thanks guys. In Victoria there is a Land Tax when "the total value of all the Victorian property you own is more than $250,000". Also the first lot you buy can be claimed as primary residency? It looks like the stamp duty is pretty high :)
     
  5. wombat777

    wombat777 Well-Known Member Premium Member

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    Be careful with slope, likely soil type and whether there are trees, rock or other issues with the site that will significantly affect cost of building, i.e. site costs.

    Builder prices assume a flat site with stable soils. Any of the above will lead to costly increases for site costs.
     
  6. Cactus

    Cactus Well-Known Member

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    If you are worried about losing it put down $1000 as a holding deposit and make it subject to finance for 21 days. Then go and shop the lot at a few of the local display homes and ask them to price something up on it with fixed site costs. Then you will get a good idea of your total costs.

    Dependant on the area of Melbourne you can get a fair idea of site costs. I'd the land on fill is it controlled fill under level 1 supervision. Slope is very important.

    Assume a H class slab as a minimum and you shouldn't go too far wrong.

    Check the contract of sale for when adjustments are calculated if they are day of sale try negotiating this clause out and making it from the day of titles. This will save you a grand or so.

    Also check design covenants as they can add cost to the build. Another one is is there a clause relating to building within a certain timeframe or not being able to onsell the lot without a home built.

    Many of these clauses can be negotiated out before signing. If the agent doesn't seem keen you can take the contracts away and sign with your conveyancer. The. Just cross out what you don't like and initial and hand them in. Developers like sales and will waive.
     
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  7. Cactus

    Cactus Well-Known Member

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    Oh and recycled water and nbn can add $4k to your build costs but are features as well.
     
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  8. Luca

    Luca Well-Known Member

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    Thanks @Caltan Pretty detailed description
     
  9. Keen as

    Keen as New Member

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    My brother has a block he's paying off and he has to go around and mow the grass all the time its a bit of a pain
     
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  10. wombat777

    wombat777 Well-Known Member Premium Member

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    Also consider public liability insurance to cover the land for the period that it is vacant. Cost is fairly low.

    I think once you have a build underway the builder's insurance largely takes over as they control access to the site with their fencing.
     
  11. albanga

    albanga Well-Known Member

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    Make sure you can build what you want!
    A friend purchsed a vacant block without checking this and couldn't build the desired home. He did this in a declining market.

    The end result was a 100k loss.
     
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