Dual occ and serviceability

If someone was to buy a block of land with the intention of building a dual occupancy (keeping one, selling the other), can the proposed sale be used in the serviceability calculations or is it purely based on current income? Thanks

 

Just on current income. If you can sell one, ie, they're not on one title, strictly speaking I wouldn't call it dual occ.

 

it's called twoplex!

 

The question is flawed. Dual Occ is 2 dwellings on 1 title. You are asking about subdividing into 2 separate titles, allowing 1 or both dwellings to be sold independently. That is not dual occ.

The answer to the broader question is no. In order to qualify for the loan, you need to pass servicing for the entire construction debt. Future /potential sale is not considered income for servicing.

You'd also need to either pay for subdivision up front and do it as 2 separate loans, or do it as 1 loan ( subject to using a lender who is agreeable) and fork out the subdivision costs after receiving OC. The bank wont lend you the money for the council subdivision fees as part of the construction loan.

 

Not sure about NSW, but in QLD you can build the 'dual occ' under 1 title. The banks see it as 1 title for loan purpose. normally upon construction complete, you have the choice to 'strata/community subdivision' them or leave a 'dual occ on 1 title'. This decision can be now or later down the track. Of course if you choose to split them, the banks value them individually and you can sell separately (pros) but you will incur separate council rate/other expenses (cons)

It is not expensive to strata titling subdivision as it seems...about $6-8k in QLD.