two houses one title

[daveandlee]

We currently own a 5 bed with a 3 bed on one title renting both gives us a great return.
It made me wonder if we were to buy another property say a 4 bed on 650m2 or so in the new mixed housing zone
and had another house built or transported to the site would we needto subdivde the land or can we leave it as one title
(mainly to save the time and expense of subdividing)
Any thoughts?

[Tan]

Depends on your council rules, it varies in each area. Rules have also generally tightened over time, but you never know. Good luck, it's a great idea when it is possible.

[Rosco]

Generally by subdividing you create more equity. But investors don't want to subdivide early as it costs more in rates each year, plus the initial payment of subdivision costs.

Watch out for the tax, as normally best to subdivide early rather than later! Generally a subdivision is taxable, so you need to be very careful of your timing on what you do. There are some good exemptions, but if you hold for a long time, subdivide and then sell, you miss out on a lot of these exemptions are most likely facing a taxable gain.

In some cases you can do the majority of the subdivision process, but without actually having two seperate titles. This keeps your rates bill down, but still allows you to take advantage of some of the tax exemptions. A good property lawyer can help with these options.

Ross

[Re@der]

Sometimes they add codicils to your building permit such as a realtive of one house must live in the other house. Granny flat reason.

[mattnz]

I would always recommend doing the subdivision asap because:
1. Council rules can change, so you could suddenly be stuck unable to subdivide
2. The banks (and valuers) view it differently so you can get your equity out to go again
3. If the council picks up any issues with the construction when you are subdividing, it is much easier to get the builder to fix them at that time. i.e. I have had issues raised by the council that the building inspector didn't have an issue with, like driveway crossover that the builder had to rectify. Good luck getting them to come back 10 years later to fix it.

Cheers,
Matt

[Swindog]

Why not lodge the sub division consent early. You dont HAVE to sub divide then and there but as long as you have a consent in place you have 2 years to start it. Just check it doesnt have a time frame condition however and each authority will be different but generally its 2 years.
Youll lower your initial out lay whilst maintaining options for down the line.

If you on sold with in that period then its an option for the next person and may even increase the value as the up front work has been considered.