Originally posted by speights boy
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Subdivided section, build or sell?
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If you not intending to sell and planing to hold for 10yeaes then you maybe better NOT subdividing and just build for rental income. (If possible).
if you owned the property for say 2 years and then subdivide and hold for another 8 to "qualify " for the 10 years rule then the actual count will start from subdevision date.
ird doesn't see it as minor improvement.
i hope it makes sense?New Zealand's #1 Marketplace for Property Investors & Sellers!
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Yes and make your mind later of you want to sell. Them subdivide .New Zealand's #1 Marketplace for Property Investors & Sellers!
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Subdividing after 10 years so you not tainted. yes.
subdividing after 10 years will be good for adding further value as the 2 houses on separate titles could potentially value more then on 1 title.
Ie. I purchased a block of flats 2.5 years ago with the full intention to hold it long term.
i subdivided it for adding value not selling the flats separately.
now there is over 500k of new / untapped equity in this property which I can use ales where. So I'm considering selling it. And yes I will be paying tax on the capital gain. But it's still going to be worth it.
if I to be hold the block for 10 years from subdivision date and if we don't have any changes in the Tax rules then we could apply the 10 years rule.
Im in not a Tax expert but this is my understanding.Last edited by Orkibi; 13-01-2015, 03:42 PM.New Zealand's #1 Marketplace for Property Investors & Sellers!
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Unless the rules have changed, John the builder may jump in, you can apply for consent to build a second dwelling. Last time I looked at doing it the consent requirements were basically exactly the same as subdivision so there was only paperwork required later to actually subdivide nothing would need upgrading.
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It seems like there's not much difference in cost between building a second dwelling and actual subdividing, as the major part (Auckland council fees, development contributions and Watercare fees) are to be paid in both cases, right?. The difference is probably in LINZ fees and legal fees, which is not much?
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Find out about the reserve and development contributions and when are they do.
in some councils you pay them when the sub is completed 224 issued.
And in some they are do when cod compliance certificate is issued for the dwelling. Even if you are not subdividing.New Zealand's #1 Marketplace for Property Investors & Sellers!
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