andysarah

Thanks everyone for you comments. It is still a little confusing, but it is getting clearer (i think!).

Our main thoughts are not really to buy land as a straight investment, but with a view to building on it at a later date when we are ready. As prices are rising, we were wondering whether it is better to get in soon so to speak, rather than in a couple of years during which time prices would have continued to rise. Of course, the plus for us is that if we had changed our minds about where we wanted to live we could then sell the land (hopefully at a profit!) which would help us to fund an onward move. The concern for us is that when we are ready to move, prices would have risen beyond our reach.

With the complexities of temp residents buying property I am thinking it may be better to wait until our PR is processed.

Cheers

Sarah

tictac

We've done exactly what you are proposing to do, for exactly the same reasons.

We've owned our block of land for 3 months and we have another 15 months before we have to commence the building process in accordance with the covenant.

Our land was not cheap and the last remaining blocks which are about to come onto the market shortly (200 square meters smaller than ours and in a less elevated position) have a starting price of $330k.

Up until yesterday we were dead set on commencing the building process asap but now we are considering selling up as we do not want the worry that comes with large mortgages and the prospect of being owned by a bank.

This fear and worry, which we never had in the UK, overrides our need and desire to own our own home here in Australia.

We've got to decide whether to hang on to our land as long as we can and continue making the mortgage payments on it, hoping that the land value will increase more than our mortgage payments over the next 15 months.

We also need to take into account any stamp duty we'd have to pay on the sale of the land, which I think is the 0.5 x the amount of equity x the nominal tax rate.

Selling our land will sever our ties with the area and place us into a zone of uncertainty.

The housing situation, as a result of the prices being asked by developers and real estate agents and the constant interest rate rises, is like a huge black cloud hanging over us (and many others) every day and is souring our experience of Australia.

Over the next few months we will decide whether the effort and expense required to become a homeowner and the 'privilege' of living in Brisbane is really worth it.

Timber Floor Au

Very true words TICTAC.

Its not easy, and I think jumping onto the so-called , property ladder has or should serve as a good positive experience, well least I hope it does.

The problems lie, I think in the main, with a proportion of expats, is to live in suburbia, with all the trappings of suburban life, reassurance of neighbours, and that community spirit.

The Aussie dream of living this, is becoming far more expensive and unachievable.

I really dont know why, more poms, dont make the effort, to peruse outlying suburbs, such as where I and a few others live.. allbeit these are becoming more and more costly.. they still offer better ROI , IMO.

Good Luck Ste

longreach

???????

Do you mean capital gains tax?

tictac

Stamp duty, capital gains tax... whatever

Regardless, it's something *else* which adds to the cost of selling land and comes out of *my* pocket.. or so I've been led to believe by a so-called advisor/broker/conman/get rich quick merchant, the sort that seem to be ubiquitous here in Queensland

That's my experience to-date anyway. There probably are good, reliable, honest brokers out there (such as yourself) but finding them is not easy

Cheers

longreach

Seems you have had some bad experiences... sorry to here that.

Perhaps you should take a look at http://www.ato.gov.au/individuals/pa...60#001_002_026

It's strictly speaking not a cost of selling land. It's simply the tax you pay on any gain you have made.

For example, if you bought the land for $250,000 and sold it for $300,000, then you have made a $50,000 capital gain and mabe subject to capital gains tax (I say maybe because it all boils down to your situation but in most cases it will be the case) on that $50,000.

Obviously, if you sold it for the same value then none would be due and if you sold if for less then you would have made a capital loss and can claim tax relief.

You will find capital gains taxes in most of the economies in the world including the UK.

The only direct cost of selling the land is the agents fee, solicitors and maybe early settlement fee on your loan depending on your mortgage arrangements.

kips

Hi sarah

Before you buy a block of land find out what the site costs are likely to be to build a house on it. The steeper the land the higher the cost and the type of soil on the land can also affect the price of building quite significantly. Three weeks ago me and the OH bought a flat 770sqm block 5 minutes walk from beautiful Corindi Beach (35 km from Coffs Harbour, NSW). Our builder estimated site costs of about $4k but after soil tests the cost has risen to $21k which was a shock. The builder argues it is because the land is made up of clay soil and piers (big holes drilled on the land with cement poured into them) have to be out in place before the concrete slab can go on top. Flabbergasted by the hugh increase which is the equivalent of our planned spend on the landscaping, fencing, lighting and blinds, we talked to other builders on the development building homes close to land and discovered their costs were about half. So now we are trying to get the builder to reduce the cost and waiting for a response from the MD of the company as the salesman can't make that decision. E-mailed on Wed after and still not had a response. We feel we are being ripped off. We do have another builder keen for our contract but we like the design and interior of the first builder. We still believe the land is a good investment as it is virtually impossible to buy a block this size so close to the beach anywhere in NSW (probably Australia) for the price we paid.

kips

dazah

hi sarah

im training to be a estate agent in victoria

here in victoria you need to put down a 10% deposit and ballance in 60 days but depending on the contract

but if your going to buy a plot of land questions you need to ask is what size of property can you build on it. the estate agent should be able to answer the question you have

tictac

With regards to the first time home buyers grant, if you are eligible (as PR I guess you will be) you will get this once your slab is laid. You will not be eligible for the grant if you just sit on the land and do not commence the build process

Our regular-shaped block is 850 Sq M, flat and does not have any retaining walls. We have been told to budget in the region of $10k for site costs.

longreach

Quote:

Originally Posted by tictac

With regards to the first time home buyers grant, if you are eligible (as PR I guess you will be) you will get this once your slab is laid. You will not be eligible for the grant if you just sit on the land and do not commence the build process

Correct. You will then have to live in it for 6 months out of the first 12 otherwise you will have to pay it back.