Financing a subdivision

Discussion in 'Development' started by Peter P, 25th Jan, 2017.

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  1. Peter P

    Peter P Well-Known Member

    Joined:
    17th Apr, 2016
    Posts:
    170
    Location:
    NSW
    Hi members,

    First time doing a subdivision of an investment property and I wasn't sure how we should be paying for things.

    The investment has loan with cash sitting in an offset. Also, extracted equity in a LOC.

    We had the subdivision approved cost free (managed to get the expired approval from previous owner approved)

    Costs for this process from my knowledge include:
    - surveyor fees (plans, 88B...)
    - sec 73 cert
    - obtaining subdivision certificate
    - lodgement of plans
    - fees in splitting existing loans

    Where should my funds come from to finance the subdivision?
     
    Peter P, 25th Jan, 2017
    #1
  2. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,943
    Location:
    Australia wide
    As a general rule.

    Borrow to pay all costs from the LOC. Don't use any cash. Seek tax advice.
     
    Terry_w, 25th Jan, 2017
    #2
    Peter P and Perthguy like this.
  3. Paul@PAS

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

    Joined:
    18th Jun, 2015
    Posts:
    23,504
    Location:
    Sydney
    Each property needs a clear tax plan. What is deductible. What gst issues. Sell. Hold. Rent. CGT or ordinary income?
     
    Paul@PAS, 25th Jan, 2017
    #3
    Peter P likes this.