buying land in Perth
Mar 15th 2004, 1:06 pm
#16
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Joined: Jul 2003
Posts: 135
Re: Thats confusing...
Originally posted by maxpaxx
Oops - my link was spelt wrong!
Yes - we don't intend to buy here but I was offering the link for the person asking about land prices north coast.
Who are you using to build?
Oops - my link was spelt wrong!
Yes - we don't intend to buy here but I was offering the link for the person asking about land prices north coast.
Who are you using to build?
First, I agree with previous posters that you should not buy sight unseen, from a distance. Even in Perth, as elsewhere, you need to be hyper-vigilant when buying. Renting for six months to get a feel for Perth is a good idea.
Second, yes, in my view Perth land and houses get cheaper the further you go north - and north and inland. Places north of Currambine and a few kilometres inland are fairly affordable. But they are about an hour north of Perth and the suburbs can be very new and stark.
I think its fair to day the market is probably turning, though who knows for certain. I think it is softening. There are far more houses on the market, many remain listed for longer and all the estate agents we have spoken to acknowledge a cooling off.
Good luck!
David
Mar 15th 2004, 1:23 pm
#17
Thread Starter
Joined: Jun 2003
Posts: 965
Re: Thats confusing...
Originally posted by davidw
Good questions.
First, I agree with previous posters that you should not buy sight unseen, from a distance. Even in Perth, as elsewhere, you need to be hyper-vigilant when buying. Renting for six months to get a feel for Perth is a good idea.
Second, yes, in my view Perth land and houses get cheaper the further you go north - and north and inland. Places north of Currambine and a few kilometres inland are fairly affordable. But they are about an hour north of Perth and the suburbs can be very new and stark.
I think its fair to day the market is probably turning, though who knows for certain. I think it is softening. There are far more houses on the market, many remain listed for longer and all the estate agents we have spoken to acknowledge a cooling off.
Good luck!
David
Good questions.
First, I agree with previous posters that you should not buy sight unseen, from a distance. Even in Perth, as elsewhere, you need to be hyper-vigilant when buying. Renting for six months to get a feel for Perth is a good idea.
Second, yes, in my view Perth land and houses get cheaper the further you go north - and north and inland. Places north of Currambine and a few kilometres inland are fairly affordable. But they are about an hour north of Perth and the suburbs can be very new and stark.
I think its fair to day the market is probably turning, though who knows for certain. I think it is softening. There are far more houses on the market, many remain listed for longer and all the estate agents we have spoken to acknowledge a cooling off.
Good luck!
David
Has anyone ever bought a show home but leased it back to the developers so that they can continue using it? We have just been offered one in a great place for a good price with guaranteed 12 month lease and further options.
Mar 15th 2004, 1:29 pm
#18
Thread Starter
Joined: Jun 2003
Posts: 965
Originally posted by HBgirl
Hey max,
I wondered but then it was a surveyors wierd........
We are building with Dale Alcock....
A few reasons
firstly they were the only company to give me serious info and send me literature ect when we still lived in the UK.
Then we both liked the style of thier designs and the quality, and we couldnt find any realy bad stories, I have heard a lot of horror stories now!!!!
Also the show home that realy grabed our attention also had a Salesman we got on with....Big help.
We have signed up got the design finalised and have just picked all our tiles ect ready to kick off when the Titles to the land are released in May.
HBxx
Hey max,
I wondered but then it was a surveyors wierd........
We are building with Dale Alcock....
A few reasons
firstly they were the only company to give me serious info and send me literature ect when we still lived in the UK.
Then we both liked the style of thier designs and the quality, and we couldnt find any realy bad stories, I have heard a lot of horror stories now!!!!
Also the show home that realy grabed our attention also had a Salesman we got on with....Big help.
We have signed up got the design finalised and have just picked all our tiles ect ready to kick off when the Titles to the land are released in May.
HBxx
God it all takes a time doesn't it? How long will they take to actually build it?
Max x
Mar 16th 2004, 3:59 am
#19
Forum Regular
Joined: Oct 2003
Posts: 49
Hi Max,
Its so hard to know... if the wind was on our side we could be in for Xmas....but I dont hold out much hope.
They say 6-8 months. But there are a lot of factors...as in Perth the new build thing is huge there are so many delays. Title release and waiting for bricks are just 2, then you need the build to go smoothly.
There are some advantages to using a big company like DA, they bulk buy bricks so you are less likly to have to wait for a production run of the brick you want. Also they have much higher insurance levels so they can have more houses being built at the same time. But some people will argue that you loose on survice (not that we have found that yet). Also some companies have different views on you making changes to the plans, they wioll all say you can but its a case of how much extra you pay for the privalege.
HBxx
Its so hard to know... if the wind was on our side we could be in for Xmas....but I dont hold out much hope.
They say 6-8 months. But there are a lot of factors...as in Perth the new build thing is huge there are so many delays. Title release and waiting for bricks are just 2, then you need the build to go smoothly.
There are some advantages to using a big company like DA, they bulk buy bricks so you are less likly to have to wait for a production run of the brick you want. Also they have much higher insurance levels so they can have more houses being built at the same time. But some people will argue that you loose on survice (not that we have found that yet). Also some companies have different views on you making changes to the plans, they wioll all say you can but its a case of how much extra you pay for the privalege.
HBxx
Mar 16th 2004, 5:28 am
#20
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Joined: Jan 2003
Location: Brisbane
Posts: 1,576
Re: Thats confusing...
Originally posted by maxpaxx
Now heres an interesting option!
Has anyone ever bought a show home but leased it back to the developers so that they can continue using it? We have just been offered one in a great place for a good price with guaranteed 12 month lease and further options.
Now heres an interesting option!
Has anyone ever bought a show home but leased it back to the developers so that they can continue using it? We have just been offered one in a great place for a good price with guaranteed 12 month lease and further options.
1) This would be considered an investment property as you are earning income from it and as such you would not be eligable for the First Home Owners Grant (mind you it's only $7,000).
2) As an investment property the stamp duty is about twice what it is for property brought to live in.
3) When or if you decide to move into it you would be liable for CGT on the increase in value of the property.
One way around this is to exchange contracts soon but put a completion date way in the future, (say 12 months)that way you would have a house at an agreed price no mortgage to pay untill completion, as stamp duty and FHOG is not paid untill completion.
One scam developers are running here at the moment is targeting property investors with what seems like a good deal. namely they guarantee you a income from the property for x years to give you the impression the property generates more income than you would expect.
Only problem is they have weighted the sale price sig upwards to cover the cost of this scam. Once the x years is up you find that no one will rent at what was promised by developer.
Just my thoughts.
Mar 16th 2004, 9:21 am
#21
Thread Starter
Joined: Jun 2003
Posts: 965
Re: Thats confusing...
Originally posted by Kiwipaul
I can see a few problems doing this all of them bad.
1) This would be considered an investment property as you are earning income from it and as such you would not be eligable for the First Home Owners Grant (mind you it's only $7,000).
2) As an investment property the stamp duty is about twice what it is for property brought to live in.
3) When or if you decide to move into it you would be liable for CGT on the increase in value of the property.
One way around this is to exchange contracts soon but put a completion date way in the future, (say 12 months)that way you would have a house at an agreed price no mortgage to pay untill completion, as stamp duty and FHOG is not paid untill completion.
One scam developers are running here at the moment is targeting property investors with what seems like a good deal. namely they guarantee you a income from the property for x years to give you the impression the property generates more income than you would expect.
Only problem is they have weighted the sale price sig upwards to cover the cost of this scam. Once the x years is up you find that no one will rent at what was promised by developer.
Just my thoughts.
I can see a few problems doing this all of them bad.
1) This would be considered an investment property as you are earning income from it and as such you would not be eligable for the First Home Owners Grant (mind you it's only $7,000).
2) As an investment property the stamp duty is about twice what it is for property brought to live in.
3) When or if you decide to move into it you would be liable for CGT on the increase in value of the property.
One way around this is to exchange contracts soon but put a completion date way in the future, (say 12 months)that way you would have a house at an agreed price no mortgage to pay untill completion, as stamp duty and FHOG is not paid untill completion.
One scam developers are running here at the moment is targeting property investors with what seems like a good deal. namely they guarantee you a income from the property for x years to give you the impression the property generates more income than you would expect.
Only problem is they have weighted the sale price sig upwards to cover the cost of this scam. Once the x years is up you find that no one will rent at what was promised by developer.
Just my thoughts.
I had found out about the stamp duty thing yesterday but didn't know about this CGT tax. What percentage is it 10%?
With the rental - yeah they would be paying way over normal rental value for the first 12 months but I had calculated we would either then move in or rent it out for a standard rate.
It's a shame really the house is in a great location and big block but I can't see how it could work out. The block alone is worth over $300,000 and the house to buy off plans is $224,000 with over $75,000 extras included it would be a great price!
..back to the drawing board
Mar 16th 2004, 9:36 am
#22
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Re: Thats confusing...
Originally posted by maxpaxx
..yes and good thoughts at that!
I had found out about the stamp duty thing yesterday but didn't know about this CGT tax. What percentage is it 10%?
..yes and good thoughts at that!
I had found out about the stamp duty thing yesterday but didn't know about this CGT tax. What percentage is it 10%?
10% would be nice
They add your profit to your annual earned income for the year in which you make the profit. That then decides your tax bracket. In general that often means 48.5% with the medicare levy.
However, if you hold the asset for more than 12 months, they only add half of the gain.
So $100,000 profit made in less than 12 months = $ 48,500 tax
but if you sell after 12 months its only $24,250 tax
Mar 16th 2004, 9:48 am
#23
Thread Starter
Joined: Jun 2003
Posts: 965
Re: Thats confusing...
Originally posted by ABCDiamond
Capital Gains Tax
10% would be nice
They add your profit to your annual earned income for the year in which you make the profit. That then decides your tax bracket. In general that often means 48.5% with the medicare levy.
However, if you hold the asset for more than 12 months, they only add half of the gain.
So $100,000 profit made in less than 12 months = $ 48,500 tax
but if you sell after 12 months its only $24,250 tax
Capital Gains Tax
10% would be nice
They add your profit to your annual earned income for the year in which you make the profit. That then decides your tax bracket. In general that often means 48.5% with the medicare levy.
However, if you hold the asset for more than 12 months, they only add half of the gain.
So $100,000 profit made in less than 12 months = $ 48,500 tax
but if you sell after 12 months its only $24,250 tax
So do you still have to pay CGT on an investment property even if you don't sell it? and move in yourself? How would anyone know what the value was unless you were actually selling it? Or have I misread KP's message?
Mar 16th 2004, 10:35 am
#24
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Re: Thats confusing...
Originally posted by maxpaxx
OMG! It gets worse!
So do you still have to pay CGT on an investment property even if you don't sell it? and move in yourself? How would anyone know what the value was unless you were actually selling it? Or have I misread KP's message?
OMG! It gets worse!
So do you still have to pay CGT on an investment property even if you don't sell it? and move in yourself? How would anyone know what the value was unless you were actually selling it? Or have I misread KP's message?
CGT is payable on disposal. An example may be:
You rent out the property for 1 year, the move in yourself, and sell after 4 years. CGT would only be assessable on 1/4 of the actual gain, during the entire 5 years. And that would be halved as you owned it for more than 12 months.
Also, if you did not own another home at the time that it was being rented out, I think you can still class that property as your principal place of residence, and get the full exemption = NO CGT.
It may be worth reading Guide to capital gains tax 2003
Sorry i didn't reply earlier, I was watching "The Bill"
Mar 16th 2004, 10:54 am
#25
Thread Starter
Joined: Jun 2003
Posts: 965
Re: Thats confusing...
Originally posted by ABCDiamond
No, I don't think it is that bad.
CGT is payable on disposal. An example may be:
You rent out the property for 1 year, the move in yourself, and sell after 4 years. CGT would only be assessable on 1/4 of the actual gain, during the entire 5 years. And that would be halved as you owned it for more than 12 months.
Also, if you did not own another home at the time that it was being rented out, I think you can still class that property as your principal place of residence, and get the full exemption = NO CGT.
It may be worth reading Guide to capital gains tax 2003
Sorry i didn't reply earlier, I was watching "The Bill"
No, I don't think it is that bad.
CGT is payable on disposal. An example may be:
You rent out the property for 1 year, the move in yourself, and sell after 4 years. CGT would only be assessable on 1/4 of the actual gain, during the entire 5 years. And that would be halved as you owned it for more than 12 months.
Also, if you did not own another home at the time that it was being rented out, I think you can still class that property as your principal place of residence, and get the full exemption = NO CGT.
It may be worth reading Guide to capital gains tax 2003
Sorry i didn't reply earlier, I was watching "The Bill"
I still think this plan might work out as we are not going to buy another house till we have moved into that one and don't intend to sell it - at leat not for a long time.
They have knocked $40,000 off the advertised price. It's a good block over 600sqm.
Am I right in saying that Aussies want North facing gardens like Brits want south facing? The back yard on this one is facing west.
We are going to send someone round to do a reccie for us this week so will keep you posted. They will rent it for definately 12 months - I figure it would take that and more to build anyway so it may work out quite well.
I have been reading that there are good tax breaks for investors and some choose interest only mortgages because they get a better deal with tax? It all seems very complicated to me - if we did that we would have a large excess of cash each month and we couldn't buy another place while we were renting that out.
..hey do you want to be my financial guru
Mar 16th 2004, 11:24 am
#26
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Posts: n/a
Re: Thats confusing...
Originally posted by Kiwipaul
I can see a few problems doing this all of them bad.
2) As an investment property the stamp duty is about twice what it is for property brought to live in.
I can see a few problems doing this all of them bad.
2) As an investment property the stamp duty is about twice what it is for property brought to live in.
eg: Stamp duty on $300k property
QLD Home = $4,250
QLD Investment property = $ 8,975
WA Home or Investment = $ 12,605
This info from www.national.com.au
Mar 17th 2004, 10:41 am
#27
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Joined: Jan 2003
Location: Brisbane
Posts: 1,576
Re: Thats confusing...
Originally posted by ABCDiamond
No, I don't think it is that bad.
CGT is payable on disposal. An example may be:
You rent out the property for 1 year, the move in yourself, and sell after 4 years. CGT would only be assessable on 1/4 of the actual gain, during the entire 5 years. And that would be halved as you owned it for more than 12 months.
Also, if you did not own another home at the time that it was being rented out, I think you can still class that property as your principal place of residence, and get the full exemption = NO CGT.
It may be worth reading Guide to capital gains tax 2003
Sorry i didn't reply earlier, I was watching "The Bill"
No, I don't think it is that bad.
CGT is payable on disposal. An example may be:
You rent out the property for 1 year, the move in yourself, and sell after 4 years. CGT would only be assessable on 1/4 of the actual gain, during the entire 5 years. And that would be halved as you owned it for more than 12 months.
Also, if you did not own another home at the time that it was being rented out, I think you can still class that property as your principal place of residence, and get the full exemption = NO CGT.
It may be worth reading Guide to capital gains tax 2003
Sorry i didn't reply earlier, I was watching "The Bill"
But I agree with the rest of your comments.
Mar 17th 2004, 10:52 am
#28
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Joined: Jan 2003
Location: Brisbane
Posts: 1,576
Re: Thats confusing...
Originally posted by maxpaxx
I have been reading that there are good tax breaks for investors and some choose interest only mortgages because they get a better deal with tax? It all seems very complicated to me - if we did that we would have a large excess of cash each month and we couldn't buy another place while we were renting that out.
..hey do you want to be my financial guru
I have been reading that there are good tax breaks for investors and some choose interest only mortgages because they get a better deal with tax? It all seems very complicated to me - if we did that we would have a large excess of cash each month and we couldn't buy another place while we were renting that out.
..hey do you want to be my financial guru
But the chances of the rental income fully covering the 100% mortgage interest payments are just about zero. More likely it will cover between 50-75% and so you will still have to pay at least 25% of the monthly payments. This property is not going to be a cash cow in the short term.
Mar 17th 2004, 1:21 pm
#29
Thread Starter
Joined: Jun 2003
Posts: 965
Re: Thats confusing...
Originally posted by Kiwipaul
For an investment property DEF go for an interest only mortgages because as you said their are a number of tax breaks available to you.
But the chances of the rental income fully covering the 100% mortgage interest payments are just about zero. More likely it will cover between 50-75% and so you will still have to pay at least 25% of the monthly payments. This property is not going to be a cash cow in the short term.
For an investment property DEF go for an interest only mortgages because as you said their are a number of tax breaks available to you.
But the chances of the rental income fully covering the 100% mortgage interest payments are just about zero. More likely it will cover between 50-75% and so you will still have to pay at least 25% of the monthly payments. This property is not going to be a cash cow in the short term.
This is not your run of the mill rental. They will agree in the contract to lease the house back for 8% of the purchase price for 12 months with the view to extending that but no guarantee past 12 months - this is over double what our mortgage would be! and thats my real question is it best to just hack all that off the mortgage straight away. We plan to move into it after they have finished using it so I'm thinking smaller mortgage for us!
This really appeals to us because it would be a good year before we could finish a new build - admittedly we could buy a house to live in sooner but rent is cheaper and they would be paying double our mortgage for the first year in leasing.
Anyways we have agreed a price - you will all think we are bonkers! got 2 different people looking at it one rellie one friend of very different ages. Have the site plan from when it was built and of course the glossy brochure - just negotiating on what they will include with regards to furniture now. We are getting it $35,000 cheaper than advertised as they don't currently have any offers on it.
It's way more than we were going to spend but we are young and it would perhaps of been foolish to spend less money when we are young enough to earn it. It's still a very cheap house compared to the UK.
Dreams and schemes
Mar 18th 2004, 1:02 am
#30
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Re: Thats confusing...
Originally posted by maxpaxx
Hi Paul,
This is not your run of the mill rental. They will agree in the contract to lease the house back for 8% of the purchase price for 12 months with the view to extending that but no guarantee past 12 months - this is over double what our mortgage would be! and thats my real question is it best to just hack all that off the mortgage straight away. We plan to move into it after they have finished using it so I'm thinking smaller mortgage for us!
This really appeals to us because it would be a good year before we could finish a new build - admittedly we could buy a house to live in sooner but rent is cheaper and they would be paying double our mortgage for the first year in leasing.
Anyways we have agreed a price - you will all think we are bonkers! got 2 different people looking at it one rellie one friend of very different ages. Have the site plan from when it was built and of course the glossy brochure - just negotiating on what they will include with regards to furniture now. We are getting it $35,000 cheaper than advertised as they don't currently have any offers on it.
It's way more than we were going to spend but we are young and it would perhaps of been foolish to spend less money when we are young enough to earn it. It's still a very cheap house compared to the UK.
Dreams and schemes
Hi Paul,
This is not your run of the mill rental. They will agree in the contract to lease the house back for 8% of the purchase price for 12 months with the view to extending that but no guarantee past 12 months - this is over double what our mortgage would be! and thats my real question is it best to just hack all that off the mortgage straight away. We plan to move into it after they have finished using it so I'm thinking smaller mortgage for us!
This really appeals to us because it would be a good year before we could finish a new build - admittedly we could buy a house to live in sooner but rent is cheaper and they would be paying double our mortgage for the first year in leasing.
Anyways we have agreed a price - you will all think we are bonkers! got 2 different people looking at it one rellie one friend of very different ages. Have the site plan from when it was built and of course the glossy brochure - just negotiating on what they will include with regards to furniture now. We are getting it $35,000 cheaper than advertised as they don't currently have any offers on it.
It's way more than we were going to spend but we are young and it would perhaps of been foolish to spend less money when we are young enough to earn it. It's still a very cheap house compared to the UK.
Dreams and schemes
Good luck to you if you have got a good one, and from what you have said, it sounds reasonable. 8% is twice the average rental return these days. And if its the house you want for yourselves later, then all the better.