Property Developments

You desire to do a property development?
Do you need a Planning permit?
Do you buy the property in your name? in Joint names? in a company? through a Trust?
When you sell -What about GST? Capital gains?

What borrowing issues will you confront?
Need funds to purchase and/or develop the property?
When can I start the development?

You have seen the property to develop but what conditions do I put in the Contract to Purchase and how can I finance the purchase. Read the following article and a phone call to us will assist you with your decisions.

Article

You cannot just advertise for investors!

The general rule in section 113 of the Corporations Act 2001 is that a proprietary company cannot raise funds from the general public.

A proprietary (or private) company can only raise equity finance by offering its shares to:

• *its existing shareholders or its employees; or
• *certain classes of investor.

These classes of investor include:

• * to no more than 20 investors in any 12 month period and raising no more than $2million in any 12 month period;
• * a person where no consideration is payable for the shares
• * sophisticated investors (including high net worth individuals, financial services licensees, professional investors, and entities investing more than $500,000).
  
  

GST

If the margin scheme is to apply to the supply of real property under a contract of sale the parties must agree to that in writing prior to settlement.
If the parties intend that the margin scheme is to apply, consideration will also need to be given to eligibility (the margin scheme will not be available if full GST was paid when the vendor acquired the property.
SEE ALSO ARTICLE under heading PROPERTY TRANSACTIONS regarding double stamp duty and land development before the purchase contract has been settled.