To strata or not to strata for a long term hold

Discussion in 'Investment Strategy' started by Perthguy, 22nd Nov, 2017.

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  1. Perthguy

    Perthguy Well-Known Member

    Joined:
    22nd Jun, 2015
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    11,767
    Location:
    Perth
    There are two houses on a block, fenced off into two separate yards, common drive. Both rented out.

    This is for a long term hold and there is no need to use them as security for further loans.

    Currently they are on one title but can be split so that each house is on its own title if necessary in the future.

    I am trying to work out if it is better to leave them on one title or split them. Considerations are:

    1. council rates. Will council rates increase if there are 2 titles?

    2. land tax. Will land tax increase if there are 2 titles?

    Say we are keeping these properties for 20 years. A couple of thousand increase in holding costs per property over 20 years is going to add up.

    The disadvantages I can see:

    - lower values (not as relevant if the properties are required for security)

    - insurance maybe

    I am thinking I will just leave them on one title but interested to hear peoples thoughts about advantages or disadvantages of this approach.
     
  2. wylie

    wylie Moderator Staff Member

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    Location:
    Brisbane
    I would keep them on one title. I cannot believe land tax won't increase.

    A block we hold has a UCV of $690k (906sqm) and next door 400sqm UCV is $440k. The other part of that block is UCV $460k.

    That block started as 906sqm and now being split, the UCV totals $900k. My block UCV is $690k.
     
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  3. Perthguy

    Perthguy Well-Known Member

    Joined:
    22nd Jun, 2015
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    11,767
    Location:
    Perth
    I think land tax will increase with 2 dwellings on one title.

    I think land tax will increase more with 2 dwellings each on their own title.

    :)

    That makes sense and would be what I would expect.

    Thanks!
     

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