Confusing NSW owner builder 5 year rule

Discussion in 'Legal Issues' started by george, 27th Apr, 2018.

Join Australia's most dynamic and respected property investment community
  1. george

    george Member

    Joined:
    1st Aug, 2016
    Posts:
    18
    Location:
    Sydney
    I built a house 3 years ago using an owner builder permit. It was great experience. This property is 100% owned by me.

    Now I am trying to find out if my spouse can do a demolish and rebuild as a owner builder for a different property. This property owned by me and my spouse (tenant in common).

    Based on the the fairtrading self assessment tool and application form, she seems to be eligible.

    Owner-Builder Self Assessment tool

    https://ablisfiles.business.gov.au/newsouthwales/resource/ap4654.pdf

    Eligibiltiy question in the fairtrading website.

    "Have you had a NSW owner builder permit in the last 5 years?
    OR
    Have you previously been an owner of other property in NSW where an owner builder permit was issued (whether or not that permit was in your name and whether or not the previous land was owned independently, jointly or severally)?
    "


    But if you check the eligiblity at Service NSW website, she is not eligible.

    https://my.service.nsw.gov.au/MySer...rmitForm/e640eac2-b899-446f-8970-ecda02eab15c

    Eligibilty question in the SNSW website

    "Have you or any other registered parties held an Owner-Builder Permit in the last 5 years for this or any other property? "

    Anyone knows the correct rule? I called ServcieNSW but they couldn't give me a proper answer.
     
  2. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,984
    Location:
    Australia wide
  3. 5080

    5080 Active Member

    Joined:
    4th Apr, 2016
    Posts:
    29
    Location:
    Sydney
    Good luck getting anything out of them. They are a sham!
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,246
    Location:
    Sydney or NSW or Australia
    Does she live there?
     
  5. george

    george Member

    Joined:
    1st Aug, 2016
    Posts:
    18
    Location:
    Sydney
    Yes. All other conditions are ok
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,246
    Location:
    Sydney or NSW or Australia
    If she wasn't on the previous permit, then she'd be able to get the permit. The restriction is to stop people carrying on a business of building without qualifications.
     
  7. Paul@PAS

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

    Joined:
    18th Jun, 2015
    Posts:
    23,528
    Location:
    Sydney
    Maybe not that simple. You own 50% of the property and may limit her being a owner builder since you have already completed one.
     
  8. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,984
    Location:
    Australia wide
    Have a read of s31 I linked above.
     
  9. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,572
    Location:
    Sid en e - olympic city
    Which it does not do.....heaps of places in the Bankstown LGA built like this, by people I would not trust to erect a tent.

    The thing about outlaws, criminals or those intent on something, they ignore laws and legislation.
     
    Scott No Mates likes this.
  10. Paul@PAS

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

    Joined:
    18th Jun, 2015
    Posts:
    23,528
    Location:
    Sydney
    I looked at a OB property once and walked away. It looked dodgy. Agent admitted that they see good and bad. The bads can be unsaleable.

    Cheap work doesnt make more $$$
     
  11. george

    george Member

    Joined:
    1st Aug, 2016
    Posts:
    18
    Location:
    Sydney
    It really depend. You have to spent lot of time to make sure that building contact is perfect for custom builds. Otherwise the builder will catch you on variations which is hard to avoid. If you go with a good volume builder with a standard plan, you might be OK.

    When you OB, you have to flexibility to make changes as and when required. Key is to use the best recommended trades and materials. Best unique houses always sells.
     
  12. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,572
    Location:
    Sid en e - olympic city
    You cant just make changes willy nilly as you please just because your an owner builder, and then you have to try and control and manage the trades, who are hard enough when you hold all the cards, let alone a small time one off here or there.

    Owner building is probably best if you can do a lot of the work and or you know what your doing.

    Clearly you seem to be abusing the system as your intention is building to sell it seems.
     
  13. george

    george Member

    Joined:
    1st Aug, 2016
    Posts:
    18
    Location:
    Sydney
    I think changes are inevitable during the build process unless you're buiding with a standard tested plan from a big builder. You may find a better suited tile or a better rangewood and you don't want to go though a big drama here.

    It is easy to singleout an unorganised group people like OBs. I am not denying that there are bad owner builders, like there are plenty of dodgy builders.

    Key is educate yourself. Unless you have good understanding of construction, you could be easily fooled by tradies if you'r owner buiding. Same can happen if you're going with a builder. Luckily I had some good people around. For my last build I used an independent supervisor to oversee the build during the critical stages. The house I am going to build is a 7.1 star rated house. How many builders are building 7 star rated properties? Most of them just try to meet the minimum Basix requirements. Builders margin is around 20-30% of the project cost. I don't see there is anything wrong in saving a bit by project managing if you can.
     
  14. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,246
    Location:
    Sydney or NSW or Australia
    Cost of construction in heaven more like it. Prelims, profit, overhead, risk rarely run to 15% in good times and can also be negative in bad times in order to win jobs.
     
    hobartchic likes this.
  15. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,572
    Location:
    Sid en e - olympic city

    Oh yes, cosmetic and internal fit out changes you can do till your hearts content, I am not sure why you could not change this with a builder doing it, will depend on the builder I would guess.

    Nah, best builder I knew was working on 10%, maybe the big kit type builders work on more due to buying power, but geez they must throw a lot away just in glossy pamphlets :) In saying that though, I have not know too much or any builders business, my experience is kit builders prob do it better and faster if they have a design you like as opposed to doing by self with hardly any knowledge.
     

PFI can assist you with your investment strategies for your SMSF, Life Cover for your members and assistance with compliance. We provide the research to ensure your investment selections achieve the goals. This is the value of advice