Ownership for development

Hi all,


Want to pick your brains a bit. I'm looking at a purchase now where potentially we may end up subdividing and building 3 townhouses, or we may just hold for a while and then sell with a DA.

With this in mind, between my wife and I, would it be best to hold as tenants in common, joint tenants, or individual names? I have a lower marginally rate so does it make sense to hold it under mine name?

Cheers

 

get some legal advice.

 

If its your first development I would buy in joint name.
PM for why

 

Terry I agree with this, however, you also need to have an idea about what to ask. If you are not asking the right questions, you may not get the answers you seek.

 

a simple 'what ownership structure do you recommend?' is enough.
The lawyer would then ask some questions and give some what ifs/

If someone says joint ownership, you could then get what happens with the land tax, death, subdivision, borrowings, risk etc. It might be ok, or it might be terrible, we just don't have any useful info from the op to determine that.

 

One reason would be so you can utilise the losses you will incur!

 

Given that the consequences of many legal avenues eventually results in tax, the matter could just need tax advice unless there are considerations that then need legal advice. Its liknds like suggesting evenry decision to buy a home or marry needs legal advice. Its not wrong but its like wearing a parachute all day in case you fall out of a plane. . In its simplest form you could just live there so personal onwership and main residence issues and CGT could be a major goal.

The matter of JT v TIC 50/50 and some other % and that of entity ownership are matters requiring legal advice. But finance could be factor that determines ownership too. g many lenders may require 2 incomes to service.

I often discuss tax ownership issues then recommend legal advice if its warranted. This quesion and the one about trusts are often impractical esp for firsthome buyers etc

 

Thanks all. Is there any difference in total land tax in the ACT between single name and joint name? I can't seem to find any reference to joint ownership on the ACT land tax website.

 

Crazy to buy such an expensive asset and not get legal advice on the ownership. Commonwealth tax is 1 out of about 10 things to consider.

 

have a look at the ACT land tax act.

 

there are a lot of things you should consider.

it's worth doing a tax modelling exercise to see the outcome of different structures. Even that initial modelling exercise many times causes clients to consider things that they hadn't considered before such as GST and the impact on the profitability of the project.

Do some tax modelling as part of your analysis and that will also assist as you make some decisions re structuring

 

I believe land tax is based on the value of the land and split between joint owners but read the act for a definitive answer.

Because land in the ACT is leasehold, NOT freehold, there is a lease variation charge that may be applied when subdividing or looking to build multiple dwelling on a site.
Lease Variation Charge - Environment, Planning and Sustainable Development Directorate - Planning