Construction - Joint venture

If you bought your house that much under value I'd be tempted to keep it as PPOR for awhile then just sell it to someone else for a development project and pocket $200k for doing nothing, no CGT, no GST, no risk.

Turning PPORs into development sites is messy. Adding in a JV type scenario such as that comes with even more risks.

If you really want to do a development like that I would use the equity you have in the PPOR and buy another site as an IP with a property structure and do it that way.

 

You are essentially "swapping" a site worth $730k for a $900kish new house. There is only $200k or so in but all the headache and then minus tax, GST, and rent somewhere else whilst it's done.
Keeping the house and just selling generates potentially more money without any hassle.

 

For a development addict like myself I can't believe how many times I've advised people not to develop. I evidently will have my spruiker certification taken off me.

 

We offer this type of arrangement all the time.

Each time it is structured differently depending on your aims.

This is a great way to improve your living conditions without forking out for costly extension works. Tax is complicated and the structure needs to firstly protect all parties and secondly minimize tax based on future intentions. If you plan to live and enjoy the newly built house then it is worth it. If you plan to sell then there may be better more tax advantages choices for you.

PAUL