Hi Everyone, I would like some advice on a project I am looking into. I have never subdivided before but know the value of land and property in my area quite well. I have a friend who knows subdivision and previously subdivided very close to me and adviced me to allow $250,000 per block for all your costs (commissions, civil works, CGT, GST, certificates, stamp duty) pretty much everything. There is an old house (1980s property, last sold in the 1990s) on 4700m2. The DA has been approved. It has approval to be subdivided into 4 blocks. I would like to keep one block (one with existing property, which I would knockdown and rebuild) and sell the 3 remaining blocks. I have calculated I could sell these for $2,300,000 total) I have allocated an overall budget with contingency for all associated costs as above at $940,000). 1. Would I be correct in thinking if I was going to keep one block for myself and the other 3 blocks took 1 year to be ready to sell that I would receive a 50% CGT exemption and pay no GST on these also as they were created through ‘mere realisation’? 2. From that original $940,000 budget if we were to remove $310,000 for stamp duty, agents commissions, and holding costs and CGT (with 50% exemption rule and assuming no GST). Would the remaining $620,000 be a good estimate for the civil works, council fees, consultants/project management fees and certificates? 3. Are there any other costs that you think I am missing? Would appreciate all advice. Thank you. Regards, Story
Hi Story, Depending on the particulars of the site, location, slope, services etc the cost proposed sound quite high for a 1 into 4 subdivision. Remember to consider other fees such as consultants, statutory fees including infrastructure charges, civil costs including services rectification and construction as required, earthworks and retaining, telecommunication/nbn, stormwater etc. Would need more specific site information to answer the question better on costs and GST however. Hope this helps. Cheers Matt
I don't see any way of getting around GST on the sale of the developed lots, other than to hold them for at least five years.
