Small Development Brisbane

Hello all,
I am new to this forum and hope someone may be able to provide some advice for me. I currently have a 405sqm block with a 2 bedroom house on it in the suburb of Kedron. There are unit blocks either side of the property. I purchased the property September 2013 for $350,000. Earlier in the year I got a DA from the Brisbane City Council for a two storey duplex. Essentially it is approved for two separate dwellings side by side with a wall dividing the two. There will be two separate lots of 200sqm each they will be built on. One will be a 4 bedroom, the other a 3 bedroom, both approx 190sqm. They are both long narrow dwellings (4 metres wide). I did some minor renovations when I first purchased and together with stamp duty, DA, etc. the property currently owes me $400,000. I was having difficulty getting finance to build the two townhouses myself so decided to sell the property with the DA in place. It has been on the market for about 5 weeks now. I did have a contract for $575,000 but that has now fallen over.

I am now starting to look at my options again. The way I see it, I basically have three:

1. Continue trying to sell property and see what I can get without selling it too cheap.
2. Take it off the market and wait another year or so when I may be to either a) get finance or b)try sell it again with the DA.
3. See if I can get a builder who is wiling to finance the build and give them a dwelling to keep at the end.

Real estate agent believe I will be able to get approx $625,000 each when built.

I am getting conflicting information regarding CGT and GST.

I know currently that if I sell with DA I will be able to claim a 50% discount as I have owned over a year. But what happens if I go through with Development and two new lots are created? Do I then have to wait a year to claim discount? Or if I did do something with a builder and only kept one at the end and sold it could I still get 50% discount. Also GST concerns me??

My accountant had to get out a book and look up answers to these questions which concerns me. Is there an accountant that specializes in this that anyone could recommend?

I had a quote from one builder for $400,000 but no-one else could come close to this so I believe for that price it would have been a very basic build. I know there are also BCC contributions, BA costs etc which I had budgeted for around $60,000.

Anyway, I have rambled on enough but as you can see there a number of points that I require clarification on in order to make an educated plan to move forrward. Any advice would be greatly appreciated.

Thanks

 

I think the issue of whether to proceed to development or not is a question of numbers (does it stack up in the current market) and your ability to:

A) Have the skills required to develop;
B) Have sufficient finance requirements to hold the site during construction and complete the development.

You mention that you had difficulty getting finance on your own previously. Has anything changed since then that would improve you chance of getting finance now? Perhaps you have reduced other debts since then or had an increase in income? If not, chances are you might still have the same difficulties in getting the finance required.
If you can answer these questions you should be able to make the decision a bit easier.

Regarding the CGT and GST question, this needs tax advice. You should consult with a tax adviser. There is one on this forum named @Terry_w.

Hope this helps.

 

Thanks for your response York. No, nothing changed re:finance presently so presently doing the build myself is not an option. Wifey back at work next year which will change things. Will see if I can contact accountant you recommend. Thanks