Sell or hold

Discussion in 'PropertyChat Community & Website' started by 30215, 6th Jan, 2021.

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  1. 30215

    30215 Well-Known Member

    Joined:
    6th Jan, 2021
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    TAS
    A broad question!
    Sell or hold? Block of land.
    We are First home buyers so eligible for the FHOG.
    We have a block of land in Tassie in a coastal tourism destination a town where building is going crazy, v busy on that front.
    Prices have skyrocketed. The block has increased in estimated sell price in one year by almost double.
    We have decided building in Tassie is too expensive due to the island economics, the FHOG goes to the builder. So for example when you would normally pay 48000 for a 40m2 shack, it increased by 20000 when we mentioned FHOG to builder.
    And that for a prefab...
    So the question is, if we aren't going to build should we sell now or hold on.

    The area is deemed to go up in price due to influx from other states, covid refugees, sea changers, lack of stock.

    We need a place to live and are renting. Possibly until we can buy an existing house in Tas or go to mainland and build there.

    The prices are crazy for houses units so renting will possibly be the next year or until prices return to normal...

    Unsure what to do.

    Any advice appreciated cheers.
     
  2. 30215

    30215 Well-Known Member

    Joined:
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    Location:
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    Unsure if this is the right place to post this
     
  3. Stoffo

    Stoffo Well-Known Member

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    Are you saying you can't afford to build a house on the site ?

    Or just thinking of cashing out for some profit ?

    Why would you tell a builder about the grant........
    It's like saying I won Lotto, the builder is going to load the price perceiving you can afford more !

    Don't forget that being a block of land you will pay CGT.....
    Build a house and live in it (PPOR) and all eventual sale profits become tax free
     
  4. 30215

    30215 Well-Known Member

    Joined:
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    Posts:
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    Location:
    TAS
    Thank you for the reply

    Owner has to tell the builder that they are getting FHOG as when owner applies for it and it is granted, it is sent to builder not owner. That is what we were told.

    We have also met people who were recommended building designer, builder etc by their local council and ended up paying 230000 for 60m2 colourbond shack. Difficult to build cheaply, have done a bit of research and met various people who said that they could have done it for at least a third less in price in Victoria & NSW & QLD.

    You have to be very shrewd it seems so as not to get hood winked.

    So we have decided to forego building but wonder if it is worth holding onto block for a year or sell now.
     
  5. Stoffo

    Stoffo Well-Known Member

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    Location:
    In the Tweed
    Sounds like the land price should continue to rise.

    You could be getting quotes or estimates for a build without disclosing, then only disclose after accepting the quote prior to signing the contract.

    Think of it like a Hwy (as we all know what happens), government comes up with an idea to build a $20M Hwy, but after dithering for years if not decades they finally give it the go ahead costing $30M and build it, but by the time it is finished it cost $37M, and by then traffic volumes have increased and it needs an upgrade already.....

    So, what it may have cost you to build last year will be cheaper than this year, and in 5 year may cost 50% or more than last year :oops:

    If you look at comparable land sales, deduct your original purchase price, then deduct CGT and are left with a balance you are happy with then sell (just remember that profit will become taxable income also)
     
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