How much to turn two blocks into three in Brisbane?

Discussion in 'Development' started by wylie, 9th Dec, 2016.

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  1. wylie

    wylie Moderator Staff Member

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    This is for Brisbane...

    Can anyone give me a ballpark idea of cost to reconfigure two blocks into three. It would mean creating three new titles I guess.

    I'm just trying to pull some figures together.
     
  2. Agent30yrs.

    Agent30yrs. Well-Known Member

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    very ballpark 50 to 70 K depending on issues
     
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  3. Marg4000

    Marg4000 Well-Known Member

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    Will this be a CGT event?
    Marg
     
  4. wylie

    wylie Moderator Staff Member

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    I believe not. But we will get professional advice on this. For now the ballpark figure is all I need. I've been estimating $50k but had no idea how realistic this was.

    Thanks @Agent30years.
     
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  5. Cactus

    Cactus Well-Known Member

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    Don't know Brisbane, but you may be able to do a simple cheap boundary realignment on one block making one big block and one small block. Then a two Lot subdivision on the big Lot for around $30k.
     
  6. wylie

    wylie Moderator Staff Member

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    I like the sound of that. I'll be running this all past a professional. I'll keep this in mind. Thanks.
     
  7. Agent30yrs.

    Agent30yrs. Well-Known Member

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    @Cactus you will chew up $28k alone in BCC contributions
     
  8. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    That's a pretty good ballpark. If there is a stormwater issue, ie the blocks slope away from the street and you need to put a pipe through a neighbour's block, large tree removal, or combined sewer, it can go significantly higher
     
  9. wylie

    wylie Moderator Staff Member

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    No stormwater issue (we own downhill block and will run stormwater through that). Fairly sure there is no combine sewer, but will check. I'll use $70k for my numbers. Thanks.
     
  10. Cactus

    Cactus Well-Known Member

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    Nasty for a 2 Lot sub?

    In Vic no contributions for 2 lots
     
  11. wylie

    wylie Moderator Staff Member

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    I’m told I need a valuation (or CMA) for our two blocks “as is” and then when we have three new titles issued, we need a valuation on the new titles. I believe OSR will scrap the two old titles, and issue three new titles and give each block a UCV. At this stage we would get another valuation on the newly created small lots (x 2) and the new vacant block that will hold the townhouses.

    These houses have always been IPs. When we move the houses from the large blocks to their new small lots, we create a new vacant block which used to be the back yards and we will build townhouses and hold them for rental income. I believe there is no GST required as we will not be selling the townhouses.


    I’ve got a fair idea what the current values are. Using these figures, how can I get an idea what the cost base will be for the two houses, now on much smaller lots, and the townhouse block (that doesn't yet exist).

    We will be engaging experts to guide us through this, but I need to run some numbers before we even get to that stage so I need to try to understand this.

    Current values approx -
    House 1 on 900sqm 850,000 - UCV 600,000 (we paid $450K)
    House 2 on 900sqm 900,000 - UCV 650,000 (we paid $150K)
    Total value together 1,750,000

    We get CMA or valuation “as is” while we have two large blocks with a house on each.

    We move each house to its new small lot, one third the size of what we bought. Townhouse block is vacant land that used to be the back yards (two thirds in total of the combined blocks).

    After reconfiguring two blocks into three the values would be approx -
    House 1 on 300sqm 550,000 - UCV 400,000 (estimate taken from nearby small lot)
    House 2 on 300sqm 600,000 - UCV 420,000 (estimate taken from nearby small lot)
    Vacant land 1200sqm 1,000,000 - UCV 800,000 (just a guess)
    Total value together 2,150,000

    Is there anyone who can explain how we calculate the cost basis for House 1 and House 2 on their newly created small lots, and the much larger vacant townhouse block.

    Is this the job for our accountant, the OSR, BCC, town planner?

    We need these cost bases to work out capital gain if we ever sell.

    We may sell the houses to build the townhouses. If we do, we need to know what the cost base is for each house.
     
  12. Cactus

    Cactus Well-Known Member

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    You need an accountant that understands development.

    Great project though!
     
  13. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    The agent gives you CMA. Accountant will be able to use that to provide CGT cost base
     
  14. wylie

    wylie Moderator Staff Member

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    Thanks Cactus. I've got an email ready to go to the accountant, but hadn't sent it. What you just read I've whittled down from that email which is three times the size. I am not great a keeping my questions simple. :)

    I'm going to send him the much simpler version. He has a good idea of where we are, and we've discussed our plans, but it is the intricacies of the numbers that has me stumped, and the numbers are important, especially if we find we have to sell a house to build the townhouses. We need to understand how much capital gains tax we would lose before we commit to selling anything. Darryl has previously pointed me in the right direction - thanks Darryl. Now I have to work through it.

    Thanks Darryl. I'm happy to get the CMA from a local agent. Or we will get a valuer. And then I'll get in touch with you and also with our accountant (you know who I'm talking about) :p

    Once I get these figures a bit clearer in my head, I can look at what the numbers mean to us in a few different "what if?" scenarios.
     

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