Staged development?

If you have 2 double size blocks which are side by side, so all up 4 normal sized blocks in a total land size of about 1500msq, and not enough cash/borrowing power to build a big development across all of it in one go, can you do it in stages? Ie get DA for whole thing, split block one, stage one- put 3-4 town houses at rear, reval, refinance and stage 2 put 2 more townhouses and some retail on street front, then repeat for block next door? Is there anything really stopping this? The zoning is not a problem, can build anything on it except a detached house. Has supermarket complex next door, and rear access too. Do banks get funny about this type of thing? I know shopping centres are sometimes done this ways to get new sections tenanted and paying income, and apart from the first people to move in to stage 1 having construction going on around them I can't see why it wouldn't work? Would allow us to get some equity & experience established as we go, and obviously won't require sourcing as much finance up front? Plus rear of both is just paddock, so houses on street front of blocks could still be lived in/tenanted...?
One block is a PPOR, other is IP, my thinking if this is doable start on the IP block? Plan would also include setting up a family trust and holding all properties at the end. Has anyone done this kind of thing? Location NSW south coast in case that matters.
Thanks in advance for any help.

Transfer to a FT involves duty and will trigger the income tax issues. (No CGT as its a dev undertaken for profit).

Remember that the land that was subdivided lost the MR exemption. There is a tax consequence.

Hey Paul thanks for the info. Think we need to sit down and crunch numbers a bit harder as to what structure to use for what stage of this whole thing- what makes things even more interesting the PPOR block in question is owned 50/50 my brother and I, IP block next door is my dads and we are trying to work out how to do this as a JV. One more quick question- if, like myself, someone has found themselves with an excellent opportunity to do develop something like this and don't want to stuff it up, what would your order of enquiries be? Ie 1st step financial planner, 2nd step accountant, 3rd town planner etc etc? I'm thinking I may need to find an experienced developer mentor...

Cheers!

We are in the planning stages of doing a similar thing.

We would have three stages.

1. Lift and slide the front house to allow driveway to the rear.
2. Build two townhouses using family loan, get occupation certificate, get them rented, and refinance with a bank to enable us to build the next two townhouses (which is stage 3).

We are looking at reconfiguring our double block from two to three, and we would hold each townhouse in some sort of trust to minimise land tax.

This is in Brisbane.

Thanks Wylie,

Yep forgot to mention, the land tax thing is another issue which we are trying to negotiate- my dad who owns the IP block is up for this, I am under the tax cut in currently, my brother has no property, hence wondering the best way to juggle/structure it. Land Tax vs CG vs GST, my head is starting to hurt- great problems to have though. Think I have spotted your posts about sliding the house here somewhere- very cool idea. In our case the existing dwelling set up is ridiculously convenient, rear lane access to proposed rear block and there is even a double width driveway past the front house, like I said, so many free kicks on this one we have to do it right!

Frito said:

Hey Paul thanks for the info. Think we need to sit down and crunch numbers a bit harder as to what structure to use for what stage of this whole thing- what makes things even more interesting the PPOR block in question is owned 50/50 my brother and I, IP block next door is my dads and we are trying to work out how to do this as a JV. One more quick question- if, like myself, someone has found themselves with an excellent opportunity to do develop something like this and don't want to stuff it up, what would your order of enquiries be? Ie 1st step financial planner, 2nd step accountant, 3rd town planner etc etc? I'm thinking I may need to find an experienced developer mentor...

Cheers!

Click to expand...

Probably
1. Town planner ....Determine all options available
2. Tax advice
3. Lawyer
4. Broker
5. Liquor store
6. Financial planner

Paul@PFI said:

5. Liquor store

Click to expand...

Thanks man very helpful- Liquor store ha ha- thats gold!
What is a little freaky is there is actually a bottleo in the supermarket complex next door...It's a sign!