Subdivide vs Minor dwelling??

[fuzzlevalve]

MDU will run you 220 to 250K. Subdivision in Auckland is going to cost 150K before you get a spade in the ground.

[Keenfisho]

Yeah lady over the phone definitely said 150-180k in council fees, and that it would cost roughly 20k extra to just go ahead and subdivide.

[MJMorrinsville]

Do your Homework

Have spoken to someone at GJ Gardiner today and they told me that in addition to building costs etc that the council also require 150-180k, she also indicated that it would only cost and additional 20k to subdivide....here in lies my dilemma. Should I go ahead will just the minor dwelling and pay the council their share or go ahead and just subdivide?

I cant comment on the MD vs the sub division in the Auckland area but with regards to getting your information from building companies. DO NOT TRUST A WORD THEY SAY! Please visit the website builderreviews to get some real idea of costs . This website has saved our bacon several times over and should be a staple read for any investor. Good luck👍

[BlueSky]

Yeah lady over the phone definitely said 150-180k in council fees, and that it would cost roughly 20k extra to just go ahead and subdivide.

This excludes land, construction and services. No wonder we have a housing issues.

Council has got us by the balls you cant do nothing...ask Davo!

[ammar]

This excludes land, construction and services. No wonder we have a housing issues.

Council has got us by the balls you cant do nothing...ask Davo!

So to build a house at the rear of my house, i need 500-600K ?

[Natetrade]

So to build a house at the rear of my house, i need 500-600K ?

No I don;t think it works like that - a bit of misinformation here. It should cost no more that 220-250k for a mMD

[fuzzlevalve]

MDU is 250K. A house is going to 500 to 600K at least. Subdivision adds 150 to 200K to the house plus a larger footprint. MDU much cheaper.

[Nick.goloborodko]

I'm in the same boat at the moment. Have a 899m2 site with an existing 100m2 dwelling on it in Mangere East. Looking to build a second property as a rental. What did you end up doing?

[OnTheMove]

Given you cant drop an old home on the site (I presume you cant anymore). And you are paying $3000 psqm. Doesnt it make more sense just to go for the capital gains in this situation? ie either sell the paper work to sub divide or pay the costs of sub dviding and sell the plot of land? Use the capital gains to buy a cheaper property in the SI taking a big chunk of the mortgage, making a nicely geared IP paying itself off quick smart?

[Minz]

If you bought it as an investment with no intention to develop (possibly you couldn’t prior to the AUP change), then maybe a good option could be to increase your cashflow by adding a second dwelling, or even more extreme (if you can), intensify. If you own for more than 10+ years and options change, you could then subdivide and it would be income tax and CGT free (IRD cb 12), or you retain for a quality long-term income stream.

[Rosco]

If you bought it as an investment with no intention to develop (possibly you couldn’t prior to the AUP change), then maybe a good option could be to increase your cashflow by adding a second dwelling, or even more extreme (if you can), intensify. If you own for more than 10+ years and options change, you could then subdivide and it would be income tax and CGT free (IRD cb 12), or you retain for a quality long-term income stream.

There are also other exemptions, other than holding for 10 year or more before commencing subdivision activity!

Plus there are also other sections of the income tax act you can be taxed under, other than just subdivision rules. For example rezoning rules could apply.

BUT rather than focusing on tax, focus on what is best overall. If can create good cashflow and good equity gain, then no reason to sell. If don't sell, then no tax!

Ross