Financing duplex build (but only own one side)

We are currently kicking around the idea of subdividing parent's block, knocking down old house and building a duplex. Mum would live in one, we live in the other. We would finance both builds, mum would give us 1 of the 2 blocks post subdivision.

Spoke to the bank this morning. Obtaining a loan for the amount we need is no problem. But , they will not lend us money to build on someone else's title. No issue obtaining loan for our build on our land.

How can we get around this? So far I've come up with 2 possibilities:
1. We buy the subdivided block from parents at the price of at least the build on her block - mortgage for this purchase. (Although we use the money to build her half of the duplex). Then obtain loan to construct our half. So we then have mortgage for land and house)

2. Mum funds the build on her block. We obtain loan to construct ours. At end of build we refinance and reimburse mum. LVR by doing this would be around 50% (conservative).

Wondering if anyone has any other ideas on how we could do this?

 

1. seek legal advice and tax advice.

You might buy x% now and enter into a deed of partition with your mum. stamp duty payable.
You then jointly borrow to build, later subdivide and end up with a title each without triggering stamp duty again.

You have to carefully consider the loan structuring of this, especially if you are going to be claiming a deduction.

If you do it the wrong way you could end up with mum losing the main residence CGT exemption, stamp duty payable 2 times or at a higher amount and less deductible debt.

 

Thanks @Terry_w

We have a meeting planned with our accountant , hopefully he can refer us to a property solicitor.