We have decided to do a knockdown rebuild for our new PPOR. To date we have decided on a home and obtained a quote to demolish the existing house (to get an idea of costing) There are a few other issues to resolve before we take the next step and sign up. I thought I'd ask here as someone may have done similar or can advise me who the best people to consult are. The property to be demolished is an IP. It will become our PPOR. It is currently in my spouses name. Do I get an independent valuation before advising the SRO that the property is now our PPOR? (Val for down the track when CGT may arise if the kids sell it) Do I change this property to our PPOR before or after the demolition? Or after the build? Is there any benefit in legally transferring the property into my spouses name when it becomes a PPOR? (Is this a bad idea becasue the transfer would attract CGT (sale) and Stamp Duty (Purchase Vic) When you demolish a home do you need to advise the bank? Even if the land value now exceeds the value of the property when mortgaged? Should we pay out the existing mortgage and just aaply for a loan for the building component? Or do we keep the existing loan and use our savings to do the build? This will be our forever home and passed on to the kids when we pass - if that info is of any help TIA
So many questions there. You need to check out Terry’s tax tips as many options will apply but likely will also be at least partially subject to CGT (unclear 100% from limited facts). Ensure you retain your cost base records and unclaimed holding costs (ie interest etc when PPOR) can also reduce the CGT amount. Changing ownership will likely have stamp duty applicable (check) & a will and other considerations for passing to children. Valuations are usually required when going from PPOR to earning income for the first time (usually making it an IP) as it resets the cost base. You seem to indicate going the other way IP to PPOR so unlikely to be needed. I’d strongly recommend some good professional advice and do lots of readIng up to ensure you’re heading in the right direction. Could potentially save you / beneficiaries thousands of dollars. There is likely many other important info that is important that you should really step through with a trusted advisor. Good luck
Generally no, you get an 'as if complete' valuation done based on the finished house PRIOR to knocking it down etc. Based on the as if complete value, the lender can provide a construction loan for the build. Depends on borrowing capacity etc. Speak to a broker ASAP
