Subdivision strategy

Discussion in 'Investment Strategy' started by WB, 28th Oct, 2019.

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  1. WB

    WB Member

    Joined:
    25th Sep, 2016
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    Location:
    Sydney
    Hi all
    I have a house on 700sqm in Zillmere. I paid 460k for it 3 years ago, and am on IO. I do not think I got a good deal as I was rushed by a BA and went against my own strategies - plus after reading up on this site I have realised I may have made a bit of a mistake.

    Anyway that aside, at least I have a good block of land that I could possibly subdivide and perhaps sell one to get rid of debt.

    I can see here this 400sqm block of land selling for about 320k, mine would be a bit smaller so maybe expect land could be worth 300ish
    6A Harry Street, Zillmere, Qld 4034

    Perhaps I sell the land to pay down debt? And keep the house on the other block and continue to rent it out.

    How far do I need to go with subdivision costs - worst case scenario seems to be 100k.

    So all up spent 560k (460 on property + 100k subdivision costs)
    Sell the land for 300k, then I guess there is CGT (though I am googling and can't figure out how much tax I would have to pay...)

    Any thoughts on this?
     
  2. MRO

    MRO Well-Known Member

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    Perth
    Probably not CGT, most likely ordinary income. You will need to factor in GST on sale and disregard any CGT discount you may have factored in.

    It may be worthwhile considering the alternatives. Can you sell with approvals to someone else and make more from it? Getting some formal tax advice should definitely be part of any strategy.
     
  3. WB

    WB Member

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    Thank you I will add this to the list to discuss with a tax advisor.

    What do you mean by "sell with approvals" like with a DA for a dwelling?

    What kinds of other options are there for me to consider?
     
  4. Sackie

    Sackie Well-known cafe bum of the East Premium Member

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    Make sure it can actually be subdivided. Usually they need to be at least 800sqm with a 20m frontage but I know if you're within certain zones then they relax the size. Just be sure first.
     
    WB likes this.
  5. WB

    WB Member

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    Location:
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    Thanks @Sackie busily reviewing it all. I may just meet the 200 m from the center (if I measure from the outer boundary it's like 201.9m..(!!) on the town planning map) to have a smaller lot. Fingers crossed. Am going to ring someone like Planning Insights to see if they can give me some guidance on the realities of it all.
    It's a corner block so both lots would have their own frontage.
     
  6. Sackie

    Sackie Well-known cafe bum of the East Premium Member

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    Vaucluse, Sydney.
    If you need a town planner just PM me mate.
     

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