Contents. 4 The Big Picture. 6 In House Business Team. 7 Our Property Solutions - Customer Care Model. 8 Recent Changes to NSW Property Legislation

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3 Contents 4 The Big Picture 6 In House Business Team 7 Our Property Solutions - Customer Care Model 8 Recent Changes to NSW Property Legislation 10 What the changes mean to Home Owners? 14 What support does In House provide? 16 Table of Suburbs for Dual Occupancy in R2 Zones 18 Main New Duplex Rules 20 Duplex Designs & Plans 26 Duplex - Exterior & Interior Images 32 Some General Rules 36 Frequently Asked Questions 38 Taxation & Legal Considerations 42 Recommended Steps to Follow 44 Why build with In House? 3

4 The Big Picture Improving Housing Supply in NSW Expert comments from Chris Johnson - CEO, NSW Urban Taskforce, shortly before the release of this new Medium Density Building Code Recently, the NSW Treasurer (Dominic Perrottet) has proposed the establishment of a NSW Government Productivity Commission, to operate at a Federal level. I concur, as follows; Anti Competitive issues flow from Councils restrictive zoning regime and the amount of red tape that flows down from Department of Planning, through Councils to end users. The Complex Planning System right across Australia is seriously impacting Australia s Productivity. The impact of multi-layered planning systems is stifling dwelling supply and increasing dwelling costs and thus the ability to enter the dwelling market for future generations of Australians. Each Council has a hap hazard and peace-meal approach to planning (embedded in their medium term visions for their respective LGAs) Attempting to address this problem, The Greater Sydney Commission has another (longer term) approach, The Department of Planning often has a different view and NSW Landcom is now involved in Housing Affordability.

5 In short, the wider system is un-coordinated, uncertain and thus unproductive. In-fighting & push-back by various Councils persists and politics intervenes to widen the various agendas. Future population levels for NSW are often ignored as uncoordinated decision makers drive change that does not remedy the longer term shortages that we will face going forward. 725,000 homes will be required to be constructed over the next 20 years, (an average of 36,200 new homes PA- History records that we have never achieved that number in any one year in NSW to date.) Regulation and Red Tape add $150,000 more to a new Sydney home than is the case in Queensland and Victoria. The Urban Task Force and the Productivity Commission are just two concerned bodies. Our View The release of this intelligent new SEPP Amendment (by the Planning Minister) (as set out in the Greater Sydney Commission s District Plans) will have far reaching effects, if only it is given a chance to work. Once the new code settles in, developers involved in high rise apartment developments (R4) might soon realise that the increased densities available on R2 Zoned lands and the lower construction costs will provide better business outcomes in the Council areas in which they are permitted. This should have the effect of supplying a construction solution to the expected demand, made possible by these recent rule changes. Quality Duplexes, Manor Homes & Terraces can now be a real solution to our growing population. The ingredients of better land use, faster and more liberal approval processes & parents and siblings joining together to re-develop the family home for a collaborative & successful outcome, will provide commercially sound solutions for many future generations to come. 5

6 OUR IN HOUSE BUSINESS TEAM IN HOUSE.COM 2 /22 Hudson Ave, C astle Hill YEARS EXPERIENCE ( ) ( )

7 IN HOUSE PROPERTY SOLUTIONS CUSTOMER CARE MODEL 7

8 Recent Changes to NSW Property Legislation The NSW Government changed many of the State Environmental Planning Policies and laws on 6th April 2018, to make it possible for Mum and Dad home owners in many suburbs to develop their land without lodging Development Applications through their local Council. They changed the laws permitting home owners in many normal R2 residential zoned areas to build and subdivide two storey duplexes, manor homes, terraces, attached and detached dual occupancy dwellings on qualifying allotments and to construct detached studios in their back yards. In effect, R3 Density now applies on many R2 Zoned Lots in qualifying suburbs. (Townhouses excluded, which will always require R3 Zoning). These changes have come off the back of the successful Granny Flat Legislation that has empowered Private Certifiers to promptly process any complying development application for a secondary dwelling, under Legislative changes made in In short, low rise medium density development is being robustly encouraged within normal streetscapes all over NSW and Private Certifiers can now approve the demolition of the existing dwelling, the construction of the new dwellings and the sub division of the land. In most instances, once a NSW Government PCA (Private Certifying Authority) approves your project for construction, that approval is not overturned by your Local Council and Neighbours cannot lodge objections against the development proceeding. There are some lots of land that for zoning, heritage or engineering reasons, cannot be approved under this legislation. We can check this for you before any costs are incurred.

9 This very welcome change should have the intended effect of: Increasing supply (Householders become personal property Investors) Increasing the velocity of supply by using Private Certifying Authorities. Decreasing the costs of bringing stock to market (PCAs are cheaper and faster). Eventually softening housing prices as a result of the growing medium density infill, thus making an attempt for our young first home buyers. Allowing a more achievable transition for those with young families from home unit living to a more liveable accommodation solution on smaller land parcels (with correspondingly lower purchase prices). Unit dwellers or other first home buyers can aim to move into a dwelling that contains some land for personal private open space. Changing the general density dynamic from a two tiered structure of predominantly High Rise and single level free standing homes on large parcels to a three tiered system incorporating significantly more medium density content along most suburban streets. ( The missing middle ) Improving street scapes and amenity, as a result of the new design guidelines that accompany the new Legislation. Creating more European City density models of accommodation where family members can live next door or upstairs and where land sizes are smaller, giving way to more habitable accommodation and less land allocation per dwelling. These new medium density Design Guides cover Layout, Landscaping, Private Open Space, Light, natural ventilation and Privacy requirements. One of the secondary benefits might also be that many older homes will be demolished and transformed into modern attractive homes with greater amenity more suited to today s standards and expectations. There is no doubt that the new code will cut red tape, improve efficiencies in cost and time, create urgently needed housing stock at more affordable price points, (as NSW grows exponentially over the next 50 years and beyond), and that it will produce aesthetically pleasing amenity and modern accommodation outcomes for occupants. 9

10 What does this really mean to the average home owner or personal property investor? Home owners who knock down and rebuild will normally achieve a sizeable capital gain, as well as a new home plus one (or two) more dwelling(s) on their land. Home Owners already own the land content and air space for both dwellings or they have sizeable equity. The cost of the construction is therefore usually under one third of the resale value upon completion. (depends on location) Unlike Granny Flats, subdivision is permitted in most council areas, and now this can also take place on much smaller residual land lots. This ability to sub divide and create a separate title ultimately provides adequate equity for another purchase or use elsewhere. There are tax benefits associated with the Primary Residence Exemption and Tax can be minimised substantially through appropriate structuring and pre-emptive advice. Many home owners have offspring who are daunted by the high entry price for a new home. This new Legislation provides a way to fruitfully use the family home in a more realistic way to provide a housing solution for the first home buying family member. This might be via a direct contribution into the development by the younger family member, (using their wages to service some or all of the loan), or a rental solution for them, whilst they are saving to move out. Living in close proximity to a parent has many advantages for all the family members, including the parents, especially if the cost of child minding can be mitigated in the process. Sharing equity and serviceability is a well known method for ensuring family prosperity in many countries around the world.

11 Home Owners can rent out the adjoining dwelling, ultimately for debt free retirement income or to pay down debt; or simply sell it, or join in the venture with a younger or older family member, providing accommodation solutions for them until the dwelling is sold and the money used to fund a purchase elsewhere. These important changes come at a time when the Federal Government has placed restrictions on the amount of Superannuation that can be contributed from all sources to $25,000 per annum. If you are over 60 years of age, then $35,000 can be contributed, however only $25,000 will receive concessional tax treatment. Becoming a personal property investor allows you to use the family home to accumulate $250,000-to $800,000 (depending on suburb) towards your retirement income in a tax sheltered manner over a very short period. Taking this step will be a fantastic life-line to many people and couples who are facing retirement within a few years time. The bottom line is this- For a Developer, (either as a professional Developer or as a personal property Investor) it usually means that along the way, you get to live in a beautiful new home and put a sizeable nest egg away for a rainy day, from the proceeds generated from the surplus property. If you are an investor who buys an old house to knock down, then the processes of dealing with rentals and sales might vary, but the outcomes will nearly always be very sound, particularly if the right advice is obtained and followed from inception. 11

12 What does this really mean to the average home owner or personal property investor? As an investor, substantial tax deductions apply as well as the ability to negatively gear. Up until subdivision takes place, there are no additional rates, land taxes, levies or stamp duty (unlike more expensive traditional property investments). As one of the dwellings is usually Tax Exempt (if moving back into the family home) and the other is an uncomparable property investment, excellent results are assured. As a home owner on R2 Land, who has been benefitted by many of the permissible uses of R3 Zoned Land, you have not had to compete with the developers to acquire parcels of land that are often too large for your needs, nor pay large sums for the raw land content. You already own the land that you need to create a life changing solution for yourself and your family. List of dwellings now permitted on various R2 Land in NSW: Detached Studios Granny Flats 3 or more dwellings on corner lots Two Storey Flats Duplexes + Additional Dwellings Dual Occupancy Dwellings Manor Homes Terraces (up to 10x CDC)

13 If two people acquire property as tenants in common or joint tenants and the property is subsequently sold as two subdivided developed lots, there will be a need for a Deed of Partition to be created to identify the fact that one of the new lots belongs to Owner A and the other to Owner B. Primarily, our role is to assist you with the design and construction of dwellings or other built structures; however, we know from experience that our customers need guidance and assistance in reaching the end objective in the most tax intelligent manner. They also need to be on a solid legal footing throughout the process and to make the end result more meaningful and profitable. Each person s circumstances vary and as a Building Company, we do not operate as Financial Planners or Professional Advisors. If you do not have access to the relevant experts, we encourage you to allow our panel members to assist you and our Real Estate arm to find properties for you and to manage your tenants. We would also hope that you will allow us to show other interested personal property investors the finished product over one or two week-ends at the time of completion, to assist us with presenting our capabilities to new customers. 13

14 What support services does In House provide? Free site inspections & preliminary desk top audits of your selected site, conducted by Licensed, Insured Builders. Free Expert site related advice, backed by professional appraisals. Free Preliminary Information nights, to cover off on FAQs. Free Town Planner s reports about your property s potential for development and the types of development permissible. Free quotes & low up-front deposits when you re ready to proceed. Referrals to our external independent Panel Members comprised of qualified Superannuation, Trust and Tax lawyers, Experienced Lenders, Expert Town Planners and Real Estate Agents. Everybody s circumstances are different and your project has to be Tax Intelligent and somewhat tailored around the ownership and borrowing issues, to ensure all parties enjoy maximum outcomes.

15 If you subsequently proceed with In House, any fees for advice, structuring and Partition Agreements paid to our legal Panel Member will be fully refunded to you. (Conveyancing Fees, Barrister s Opinions and Tax Rulings are not refundable). Whilst our Panel members liaise with each other to ensure that potential gaps are professionally addressed, your personal information is not shared with any staff member of the In House building entity. Display Homes and Open Homes are often available for your viewing. In house s own Architects attend to your project personally, in our offices, and in collaboration with you. A broad range of internal and external finishes selections are available. You have the freedom to upgrade to more expensive finishes if desired. We can source accommodation in one of our customer s completed Granny Flats for you, whilst your project is being completed. You will have as much contact as you feel necessary with our In House Consultant. Our Real Estate Division can find sites for you and find tenants for you. Navigating the various vagaries of the Tax Act well beyond the project s completion date sometimes becomes necessary, as people s circumstances change. (We like to remind our customers that the money is made in the planning stages ). Naturally, you can continue your business relationship with our external Panel Members well after your project has been completed. Prior to Construction, In House Property Solutions can arrange for Pool and Shed removals and most Tree Removals. In House Property Solutions then arrange and manage all Architectural, Hydraulic and Civil engineering plans and specifications and Sustainability Certificates etc After Hand Over, we can arrange landscaping, retaining, fencing and paving works. 15

16 Dual Occupancy in R2 Zones Sydney & Central Coast + Subdivision The following is a list of the required lot sizes as noted in Council LEP for R2 Low density Residential Because of the multiple controls, each lot will need to be individually assessed. Any Local Government Areas (LGAs) that are involved in amalgamation may still be controlled by the LEP of the previous council. This situation is being updated but will take time. The final lot size for each Torrens Title lot is 60% of the lot size for the land as included in the LEP lot size map for that area. This control does not apply to strata subdivision. For Strata Subdivision where the dwellings are adjacent to each other, the Strata Area, that is the footprint plus private landscaped areas, must be more than 180 m² for both dwellings. Floor Space allowed is 25% of the lot size plus 300m², except Willoughby Council. Council - R2 Zone Initial Minimum Lot Torrens Title subdivision Notes size required by LEP requires 60% of Council Lot for duplex develop- Size in each new Dual Occu- ment. pancy lot created. Blacktown 500m² for normal block 600m² for corner block Council Lot Sizes can range between 250m² to 450m² Subdivision only on 600m² corner block Bayside- Rockdale 700m² Burwood Bankstown Canada Bay 500m² Attached 500m² Attached 700m² Detached 450m² Attached 800m² Dettached Camden 400m² Canterbury Campbelltown 700m² to 900m² Cumberland - Auburn 450m² Cumberland- Holroyd 550m² Fairfield Gosford Council Lot Sizes can range between 230m² to 450m² Council Lot Sizes can range between 400m² to 500m² Council Lot Sizes can range between 400m² to 650m² Council Lot Sizes can range between 200m² to 450m² Council Lot Sizes can range between 220m² to 900m² Detached must have 20m frontage Terraces not permitted Note Growth Areas SEPP 500m² Council Lot Sizes typically 450m² Terraces not permitted Site Specific 600m² to 900m² 550m² Attached 800m² Attached Council Lot Sizes can range between 180m² to 500m² Council Lot Sizes for R2 is typically 450m² Council Lot Sizes can range between 200m² to 900m² Council Lot Sizes can range between 450m² to 930m² Council Lot Sizes for R2 is typically 550m² Only in designated area as per Dual Occupancy lot size map See Dual Occupancy Lot size map Only in R1 Zone

17 Georges River - Hurstville 630m² in areas designated G Council Lot Sizes can range between 450m² to 550m² Site Specific Georges River - Kogarah Hills Shire Hunters Hill 1000m² in areas designated K 630m² Council Lot Sizes can range between 500m² to 750m² 600m² Attached 700m² Detached 700m² Attached 900m² detached Council Lot Sizes can range between 230m² to 700m² Council Lot Sizes can range between 700m² to 900m² No Subdivision permitted Inner West Ashfield Permitted Council Lot Size is typically 500 m² Attached Dual Occupancy Lake Macquarie 500m² Council Lot Sizes can range between 450m² to 900m² Northern Beaches - Manly Northern Beaches - Pittwater Permitted Council Lot Sizes can range between 250m² to 750m² 800m² Council Lot Sizes can range between 500m² to 700m² only Permitted in R1 and R2 Permitted in R1, R2 and R3 Penrith 650m² Council Lot Sizes can range between 400m² to 750m² Randwick 450m² Council Lot Sizes can range between 250m² to 750m² Ryde Deferred Sutherland 600m² Council Lot Sizes range from 550m² to 800m² Waverly Permitted Council Lot Sizes can range between 232m² to 500m² Willoughby Woollahra Refer to Dual Occupancy Lot size map 460m² Attached 930m² Detached Council Lot Sizes can range between 220m² to 925m² Council Lot Sizes can range between 230m² to 700m² Parramatta 600m² Council Lot Size is typically 550m² Some areas not permitted, e.g. Winston Hills and Eastwood. Amalgamated areas follow the previous LGA LEP Dual Occupancy and Multiple Dwelling in R1 and R3 FSR 0.4:1 and refert to Dual Occupancy Restriction Map Wyong Permitted Council Lot Size is typically 450m² Allowed in R1 and R2 only Council areas not participating in the new code: Bayside - Botany Bay Hawkesbury Hornsby Innerwest - Leichhardt Innerwest - Marrickville Ku-ring-gai Lane Cove Liverpool Norther Beaches - Warringah Ryde Strathfield 17

18 Main New Duplex Rules Required for Certification (Providing land size qualifies and is zoned R1, R2, R3 or RU5 and has a frontage of 12m or 15m, as set out below) 400m ² m ² 0.67 Exceptions to Gross Floor Area Maximum Finished Gross Floor Area permitted for all Buildings on the land Frontages required - measured at the new building line 500m ² m² m ² m² % of land size, plus 300m ², divided x 2 Generally, 15.0m width is required across the newly created building line, as the parking requirements that exist between 12 and 15 meter width frontages are very restrictive. Please see below for parking requirements if the land is < 15m wide. Excludes 1 x car space, any open areas >1.4m high, internal voids, stair wells and balconies. Articulation Zone Built form can protrude 1.5m into the front setback to allow for eaves, Bay windows, entry porches, steps and ramps. Front Setbacks from Primary Roads 400m ² - 900m ² = 4.5m 900m ² m ² = 6.5m However - This rule applies first - The average setback of the 2 nearest dwellings, with their boundaries within 40m2 of your boundary and situated on the same side of the road as your own land is to be taken as the front setback for any development. If not 2 existing dwelling boundaries within 40.0m, then the rules to the left here apply. Exceptions - The measurements from the front of the buildings on either side are not to include garages or other built form that protrudes, nor can you consider attached / detached development or Battle-axe development in your assessment. Rear & Side Setbacks At Ground Level At 2nd Story level Side Setback for ground floor - 900mm Side setback level 2 - allow 1.4m approximately (as roof ridge determines) (i.e. Height of roof ridge less 4.5 /4)+.9 Rear Setbacks Ground level < 900m² = 3.0m; Level 2 < 900 m² = 8.0m (NB - Set Backs increase > 900m²) Rear Lane rule Private Open Space If you have a rear lane at your rear, then you can align to and build along 7.0m of that boundary. As access for parking can be afforded to the site from the lane, the frontage requirement drops to 12.00m. Private Open Space of 16.0m² for each dwelling applies - this must have one continuous minimum width of at least 3.0m. Private Open Space can utilize the area that is allocated to Soft landscaping. NB - 7.0m of rear lane serves the purpose of a setback allowance of 3.0m for privacy, over-shadowing and fire code separation. The Level 2 development setback is only 2.0m, in that instance. The Private Open Space must be on level ground, (it can be on a hard surface), and must be immediately accessible from a habitable room. (Open Al frescos qualify for Private Open Space, so long as any dwarf wall is under 1.4m in height)

19 Off Street Parking for new or additional Duplex A minimum of one open off street car parking space is required for each dwelling. It can also be an attached or detached car port or Garage. The car space must be set back 1.0m behind the new building line. If you are adding one dwelling to land that already contains one dwelling, then one car park per dwelling will be required. Section 3B.18 - page 22 of the new SEPP provides that if the measurement at the new front building line is less than 15.0m, then all parking for the two dwellings must be at the rear of the lot or in a basement and accessed only from a secondary road, parallel road or laneway. Window Heights These need to be 1.5m at the lowest sill. Otherwise privacy screens will be required. Corner Sites Soft Landscaping Balconies and Verandas Dwelling Configuration Frontage widths required for corner sites are only 12.0m Setbacks to the secondary road are 2.0m [or 3.0m if the land is >900m²] (nominate one as Primary Road) Soft landscaping (turf, gardens and pervious material that allows rain water to soak into the soil) must be at least 1.5m x 1.5m in dimension to qualify. It has to be calculated 50% of the total land area, less 100m², divided x2. (for each dwelling) Verandas greater than 2.0m above natural ground level cannot be greater than 12.0m². Each dwelling must face a public road. If not, a DA might be one avenue for gaining an approval, providing sufficient access is available to the rear property for emergency vehicles and removal trucks etc, (generally 3.0m-3.5m with most Councils). If Attached, each dwelling must have a minimum width of 5.0m, measured from the outside wall, to the middle of the adjoining wall. NB - The front setback for one of the dwellings must comply with the rules set out above, for setbacks from a Primary road. Important - At least 25% of the soft landscaping has to be forward of the front building line. If you are building a duplex over an existing dwelling, the soft landscaping rules would generally not apply, as no reduction to the existing Private Open Space or existing soft landscaping would take place. Balconies cannot be greater than 4.0m above natural ground level. No dwelling can be located behind the other, if a CDC is contemplated under this new Housing Code amendment and rear setbacks will vary if the dual occupancies are detached detached will almost invariably be on corner lots and will have separate primary and secondary roads and therefore will have different rear setbacks. Duplexes (attached) not situated on corner blocks will usually have one rear setback only. Medium Density Design Guide A Design Guide applies to all Approvals and must be read in conjunction with these basic rules. Battle Axe Properties and Heritage affected properties are excluded from this SEPP and a DA would need to be applied for. Terrace Housing cannot be approved on Bush Fire Prone Land. 19

20 Our homes are modern, simple and cost-effective. Design 1 F DINING 2700x4000 KITCHEN 4500x2700 LDRY 1600x1720 PWDR 1600x1800 STUDY 3500x x3000 GARAGE ALFRESSCO DINING 3000x6590 FAMILY 3500x8500 STORE DWELLING B LOUNGE 4700x3300 FRONT PORCH ALFRESSCO DINING 3000x6510 FAMILY 3500x8500 STORE DWELLING A LOUNGE 4700x3300 FRONT PORCH DINING 2700x4000 KITCHEN 4500x2700 PWDR 1600x1800 LDRY 1600x1720 STUDY 3500x3030 GARAGE 6000x3000 F Ground Floor Plan BIR BATH 3100x3100 BALC. 3800x x2700 BIR MASTER BED 4100x4100 WIR 1770x1400 WIR 1780x1500 ENS 2800x1500 WIR 1770x1400 WIR 1780x1500 ENS 2800x x x2700 BIR BIR BATH BATH 3100x x3100 BIR MASTER BED 4100x4100 BALC. BALC. 3800x x2700 BIR MASTER BED 4100x4100 First Floor Plan WIR 1770x1400 WIR 1780x1500 ENS 2800x1500 WIR 1770x1400 WIR 1780x1500 ENS 2800x1500

21 Key Design Features: Contemporary design that offers an easy modern lifestyle for your tenants or your family. Four bedrooms, a study, powder room and alfresco dining. 21

22 F F f.w. FFL ENTRY PORCH GARAGE COVERED TERRACE GARAGE ENTRY PORCH COVERED TERRACE OFFICE 3900x2500 DWELLING A DWELLING B POWDER L'DRY KITCHEN 4000x2500 DINING LIVING LOUNGE 4200x X x2500 OFFICE 3700x2500 L'DRY KITCHEN 4000x2500 DINING LIVING 7000X x x x X X3000 POWDER PAVED DRIVEWAY PAVED DRIVEWAY LOUNGE 5890x3550 A/C HWS HWS A/C RWT RWT BALC MASTER BALC LINEN ENSUITE ROBE BALC 3000x x x1900 BALC BATH MASTER ROBE ROBE W.I.R LINEN ENSUITE ROBE 3000x x x x x x2000 Design 2 Ground Floor Plan First Floor Plan F F f.w. FFL ENTRY PORCH GARAGE COVERED TERRACE GARAGE ENTRY PORCH COVERED TERRACE OFFICE 3900x2500 DWELLING A DWELLING B POWDER L'DRY KITCHEN 4000x2500 DINING LIVING LOUNGE 4200x X x2500 OFFICE 3700x2500 L'DRY KITCHEN 4000x2500 DINING LIVING 7000X x x x X X3000 POWDER PAVED DRIVEWAY PAVED DRIVEWAY LOUNGE 5890x3550 A/C HWS HWS A/C RWT RWT BALC BATH MASTER ROBE ROBE BALC W.I.R LINEN ENSUITE ROBE BALC 3000x x x x x x2000 BALC BATH MASTER ROBE ROBE W.I.R LINEN ENSUITE ROBE 3000x x x x x x2000 The perfect home for relaxation or rental.

23 Key Design Features: Our architecturally-designed homes are climate friendly and inviting, all year round. Four bedrooms, a study, powder room and a covered terrace. 23

24 Design ALFRESCO LIVING 6500X3650 W L'DRY 1500x2500 OFFICE 3600x2500 LOUNGE 5600x3100 DWELL A ENTRY PORCH 3500X DINING 3650x2600 KITCHEN 3750x2600 PANTRY POWDER 2400x GARAGE 6000x3000 VISITOR CARSP ALFRESCO 3500X x2600 DINING LIVING 6500X x2600 KITCHEN F PANTRY W F L'DRY 1500x x1700 POWDER 8 OFFICE 3600x LOUNGE 5600x3100 DWELL A GARAGE 6000x3000 ENTRY PORCH VISITOR CARSPACE ALFRESCO 3500X6500 UP X3700 LIVING DINING 3650x2600 KITCHEN 3750x x2500 L'DRY F PANTRY 3600x2500 OFFICE POWDER 2400x x3100 LOUNGE ENTRY DWELL B GARAGE 6000x3000 PORCH VISITOR CARSP W F x2600 DINING 3750x2600 KITCHEN PANTRY 2400x1700 POWDER GARAGE 6000x3000 VISITOR CARSPACE 2 1 ALFRESCO 3500X6500 UP X3700 LIVING 1500x2500 L'DRY 3600x2500 OFFICE 5600x3100 LOUNGE ENTRY DWELL B PORCH W Ground Floor Plan 3000x4400 ROBE ROBE 4300x3000 W.I.R 2950x1700 ENSUITE 2700x x4400 MASTER 4500x3200 BALCONY 3000x x x x3100 BATH 2700x x BALCONY ROBE LINEN BATH 2700x ROBE ROBE LINEN ROBE ROBE ROBE 2700x2000 BATH ROBE LINEN 4300x x DN W.I.R 2950x1700 ENSUITE 2700x x3200 BALCONY MASTER MASTER 4500x3200 W.I.R ENSUITE 2700x1500 HIGHLIGHT ROBE 2700x2000 BATH HIGHLIGHT First Floor Plan 4400x3100 LINEN DN x3200 MASTER BALCONY 5000x x2950 W.I.R ENSUITE 2700x1500

25 F F F F Our durable fixtures and fittings provide lasting quality that stand the test of time. Design 4 LIVING PORCH W L'DRY POWDER pantry 4300x2700 KITCHEN meals ALFRESCO No x GARAGE 6000x store DINING FAMILY PORCH x3000 GARAGE LIVING L'DRY store W POWDER DINING pantry 4300x2700 KITCHEN FAMILY meals PORCH GARAGE 6000x3000 No.17 No.17A LIVING 10 store W DINING L'DRY POWDER pantry FAMILY meals KITCHEN 4700x2800 ALFRESCO 3900x6890 ALFRESCO 3900x FAMILY 6000x3000 GARAGE store DINING ALFRESCO 3900x6890 No.17A meals PORCH LIVING W L'DRY POWDER pantry KITCHEN 4700x2800 Ground Floor Plan walk-in-robe 3500x4800 MASTER LINEN 3200x x No x ENS BATH walk-in-robe 12 ENS 3500x4800 MASTER MASTER 3500x4800 ENS LINEN LINEN walk-in-robe x BATH x3500 BATH No.17A No x x x x First Floor Plan ENS BATH No.17A x MASTER 3500x4800 LINEN x x3500

26 The bottom line is this, for a Developer (either as a Professional Developer or as a Personal Property Investor) it usually means that along the way, you get to live in a beautiful new home and put a sizeable nest egg away for a rainy day, from the proceeds generated from the sale of the surplus property. Dual Occupancy Solutions

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28 It is very possible for a new investor to make as much as 1 million dollars after tax from a development of this kind over 5-6 years for an outlay of $300 per week, split between 2 or 3 people. In many cases, the capital growth will take care of the capital gains tax concerns. The rules allow Private Certifiers to approve developments automatically for complying projects. Sub-division is the key to financial gain but it does trigger tax obligations. Dual Occupancy Solutions

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30 Partnering with In House In House needs to leverage relationship capital in order to create longterm partnership activities with investors, who will repetitively build new dwellings for occupation or for investment. These investors need a builder who is well-resourced and experienced and the builder needs to care for his investor audience and grow his business off the back of successful outcomes and client satisfaction. We want our customers to trust In House to take care of their future success and to understand that our future success hinges on their future success.

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32 Some General Rules that you might want to know about The new medium density code is able to be processed by a Consent Authority, such as a Private Certifier, for what is commonly called an automatic approval. For a project to gain an automatic approval it must pass the required tests, set out in the State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density Housing) The general rules do not prohibit investors from partnering with family members or friends to purchase a property for primary residence purposes, knocking down the existing dwelling and creating 2 primary main residences to be occupied by one each, which can then be sold on with the main residence exemption applied for tax-free profit. Multiple developments of this nature will see the investors progressively moving to more opulent suburbs. This new SEPP (State Environmental Planning Policy) can only be applied in Council areas where Medium Density is already permitted. Our Town Planning Panel members have provided us with a list of these Local Govt Areas which permit this additional density on R2 (Low Density Residential Land). They have also advised us on the locations where sub division is not permitted.

33 The new SEPP overrides any other planning instruments that might apply, such as a Council s own Development Control plans. There are a few exceptions to the rules such as when building in Heritage areas and on Battle Axe blocks of land, as the code does not apply to this class of land. (On those occasions we can advise on your chances of achieving a DA for those sites). Torrens Title subdivision can t apply to bush fire prone land (it has to be subdivided by Strata Title). Duplexes (attached dual occupancy dwellings) must both face the road and must be on R1, R2, and R3, Zoned land or RU5 Zoned land. If not on a corner block, you will usually need 15.0m width measured across the front building line of the combined resultant 2 dwellings. Normally, the land must be in the suburb as specified for dual occupancy in your Council LEP. If the LEP does not specify a lot size before development can be undertaken, then the initial lot size can be 400 m2. Rear set-backs are 3.0m for the ground floor and 8.0m for the upper level. The density allowed is quite generous- On a 600m2 block split in to two parcels upon completion, the internal size of each resultant duplex could be 225m2 each, over two levels. Private open space requirements for each dwelling are only 16m2. If the attached Dual Occupancy is constructed above the existing, the minimum length required across the building line is to be 15.0m or more. 33

34 Some General Rules that you might want to know about Side setbacks are minimal and only one car parking space is required per dwelling. Dwellings cannot be less than 5.0m wide measured from the outside wall to the middle of the adjoining wall in the cases where duplexes apply. Any detached dual occupancy dwellings must sit 3.0m apart. Soft Landscaping will be required at 50% of the lot size, less 100m2. On a 600m2 block, the two duplexes will yield 300m2 parcels each requiring 100m2 of soft landscaping per dwelling, which can be apportioned over the lot, with at least 25% of the soft landscaping to be in front of the building line. This soft landscaping can also double as Private Open Space. (If it is on level ground). Any soft landscaping has to have a minimum width of 1.5m

35 Manor Homes are buildable under the new code (but are more commercially viable in expensive suburbs due to the fire code compliance required). These are 3-4 dwellings (large flats) in the one block with the land subdivided into the number of parcels required upon completion. You will need 600m2 before you can attempt this. The maximum size of each resultant flat (or maisonette as they are called in Europe and Britian) is to be 100m2. The Private Open Space provisions are less than what is required for Duplexes and one car park per flat is required. Terraces are also permitted (side by side) and must also face a public road. The minimum lot sizes will be as per the Local Council s LEP or if not specified, then 600m2. You will need 18.0m frontages with 1.5m side setbacks on either side. The density cannot exceed 60% of the current lot size if using this new housing code, however, the density rises to 80% if the development is undertaken on R3 Zoned land. Townhouses are not permitted under the new housing code and must be developed on R3 Zoned Land only, bearing in mind that the new code requires all dwellings in a new development to face a public road. Where land is developed and then subdivided by Torrens Titling, it might be possible to construct a 60m2 Granny Flat and a detached 36.0m2 studio behind the resultant dwelling or dwellings, subject to sufficient land being available and other criteria being met. The width of the subject residual lot must be 12m at the new building line and the new lot must yield 450m2 or more for an approval to be considered. Always allow sufficient construction access for the development of a granny flat and duplex behind your Torrens Title Sub-Divided Duplex. if the land size permits and if side access is available. It should be possible to use another planning instrument to complete these works later should you experience difficulties with a contemporaneous application for all three structures from inception. 35

36 Frequently asked questions 1. What is the official name of the new SEPP (now commonly referred to as the new Medium Density Housing Code)? State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Medium Density) What date is recorded as the official commencement date for this new SEPP? 6th July How much will the knock down of my existing home and construction of a 450m2 Duplex typically cost on a reasonably level block of land? Approximately $780k -$790k including GST, but could be more depending on demolition and site costs and any upgrades selected. 4. Can a Private Certifier approve all of the work including knock down, construction and re-zoning? Yes, due to the certainty of the pre-existing R1, R2, R3, RU5 Zoning, in the vast majority of cases. Exceptions will be Heritage Listed properties, (or those in Heritage Conservation areas), Terrace homes in Bushfire affected areas and those lots situated on flood affected sites or sites where storm water management can t be effected to accord with the Local Council s hydraulic engineering plans. In those cases, a DA through Council can generally be successful if the approval-criteria is met. If a dwelling house is to sit closer than 9 m to a freeway boundary or under a flight path or upon land that has a Bush Fire Attack Level of 40 or higher, then generally it will be referred to Council as well.

37 At In House we deal with these matters every day and can advise or mentor you through this process without misconception. In cases where Council is unsure if they will support a lodged DA, we usually arrange a Pre DA Conference in advance of lodging, then attend with you and present the documents and floor plans etc to Council s planning approvals team and engineers. Council will then advise in advance what their exact requirements will be for approval. Unfortunately, development on Battle Axe blocks will need to approved through the DA process and un-sewered land and land not connected to AUSGRID (electricity) would also need to be referred to Council, however the incidence of these lots arising would be very low in the zonings that apply to this SEPP. 5. Does the new Medium Density Code override the Council s LEP? No, the LEPs have been amended to include the new code, however the new Code overrides Council s Development Control Plans and any approvals by a Consent Authority for a Builder to construct under the new Housing Code must follow the Design Guidelines which accompany the new Code. These guide lines cover many aspects such as private open space and amenity and despite the increased density are expected to improve the streetscape and give people improved accommodation options. 6. What sort of site costs might make my project more expensive? There is often a need to remove trees and large tree roots, sheds, garages, swimming pools and the like. If the land has been previously filled or you have insufficient power coming into your site to power two homes, or a steep fall over the site, or significant storm water drainage issues, these will increase the costs. 7. Will Subdivision be automatically permissible, once the project is completed? At the time of writing this material, there are only a handful of Councils who prohibit sub-division of medium density dwellings. Blacktown Council require corner blocks with 300m² minimum residual lots to be produced before subdivision will be permitted. Hills Shire Council prohibit subdivision of all Dual Occupancy development. 37

38 Taxation & Legal Considerations Ownership Structures Depending on what entity you chose to buy your property there are both legal and tax implications. Advice should be sought before deciding to buy in either a company name, in a trust, or as an individual. The new low rise medium density housing code will allow dual occupancies to be carried out under a fast track complying development approval. This new legislation will permit landowners the opportunity to subdivide and sell land they have owned for a period of time and which may provide theselandowners with substantial profits from the project, raising the question of how the profit will be characterised. Original Intention (Developer versus Investor) In determining what tax liabilities would apply, it is important for you as landowner to determine what your original intention is, in entering into the venture of acquiring and developing the dual occupancy.

39 If your original intention is to make a profit, as a Corporate trading entity involved in the developing of properties in the ordinary course of your business, (i.e. usually turning the stock over immediately), then it may be deemed to be a profit making venture and tax applies as a Corporate trading entity. (as you would normally be viewed by the ATO as a Developer, CGT would not apply, GST would apply, and all net profits would normally be taxed through your trading entity at the marginal rates for Corporations, currently 27.5%) If you are not involved in the business of acquiring and developing properties, and your intention is to develop and hold for investment purposes, then the provisions of both CGT and GST will apply and you will be viewed by the ATO as an Investor. If you hold for longer than 12 Months, then the 50% CGT discount would apply and if you hold for a longer period (say for example 3 + years), GST should not apply, as the dwelling being sold may not be considered new. Holding for a few years avoids being viewed by the ATO as a Developer, mitigates the CGT liability after a holding period of 12 months & eliminates the obligation to pay GST on sale of new property. How the sale of a new property is treated for tax purposes all comes down to your original intention at the initial time of purchase (and the ability to prove this intention to the ATO). Proof may include items such as correspondence with your Accountant, Legal Representative, Builder, Lender and Real Estate Agent as well as minutes of meetings etc. The number of times that a person develops land is irrelevant. It is the original intention for any one event which determines how the subject profit will be treated for Tax purposes. Corporate Structure A Corporate Structure provides you with: Limited liability, up to 20 shareholders, Tax rate currently 27.5% on net income. Balance of income can be distributed as a franked dividend. For Tax purposes, determination of net income is; the gross sale price for each property, less the costs of acquisition, construction and selling costs. 39

40 Taxation & Legal Considerations Unit Trust Structure using Corporate Trustee Unlimited number of unit holders Beneficial ownership vests in the trust, which in turn is owned by the unit holders A unit trust pays no tax on its net profits, but the profit must be distributed to the tax paying beneficiaries. Tax paying beneficiary may be: Corporate beneficiary Individuals Discretionary trust SMSF Tax is then determined in accordance with the distribution to the entity to whom distribution is made. A person s individual circumstances will dictate the most appropriate structure to be used. The Main Residence Exemption will always apply.

41 One-Off Investor (mum & dad) In a situation where land that is suitable for medium density development and in which land is owned by mum and dad investors proposing to knock down their home, it is very important to record your original intention. In this regard, it is important to record which of the two properties will be held as your principal place of residence, and which property is to be immediately sold or held for investment purposes. Upon the date of the subdivision event, the following applies: If both properties are sold together, one of the homes would be subject to CGT. If mum and dad reside in one of the homes, and they sell the other dwelling, after holding it for at least twelve months from the date of the C.D.C. (Complying Development Certificate) or hold it as a rental investment for that period, CGT will apply at the 50% discount rate. If purchasing a new home with the intent to develop and occupy one of the completed dwellings as a Main Residence, the 12 Months will commence from the date of exchange of purchase contracts on the subject land. GST Implications If the property is acquired as a profit-making venture, (to sell immediately) GST will be payable on the cost of the development (materials and labour) as well as on-sale of the property. (Tax Credits will apply to mitigate the GST payable on Sale). If the property is acquired as an Investment, (i.e. longer term) GST will only apply if the dwelling is sold whilst still New. Unlike Developers who normally need to turn their trading stock over quickly, Investors will normally place the dwellings onto the rental market for taxable income and hold for a few years for increased Capital Gain. 41

42 The Recommended Steps To Follow 1. It is recommended that you elect in advance which dwelling that you will keep for the main residence exemption and which will be treated as an investment or profit. Clearly identify for future Taxation purposes what your intentions are and send s to the aligned professionals assisting you with the process. 2. Discuss a Partition Agreement with your Lawyer, so that future ownership, loan and subdivision problems are easily avoided. 3. If the Builder s site inspection advice, Town Planning advice, Construction Quote and initial discussion with a Lender look promising, obtain the necessary Legal advice and apply for the loan in the preferred structure that works best for you or your co-joined borrowers. 4. Once the loan is approved in principal, a survey will be done, followed by Architect s and Engineer s drawings, a BASIX Certificate and a formal approval from a Consent Authority, normally a Private Certifying Authority or Local Council. For Owner occupiers, the date of this approval will trigger the beginning of the 12 Months ownership period for CGT discount purposes.

43 5. It is important to obtain a Valuation for your home at the time of the Approval by the Consent Authority. Demolition can then occur and construction can then commence. (The valuation will be used later for Tax purposes, to determine or prove how much profit was made) 6. During your discussions with your Builder, it is important to discuss your intentions regarding which Dwelling will be retained and which one will be rented and subsequently sold. This will sometimes (but not always) mean that the standards will be higher on the property to be sold and the cost base will need to be adjusted accordingly for your Tax Credits. 7. Whilst Building works are being completed, In House can accommodate you in one of the Granny Flats that we have built for one of our other investors. The cost of the rent would normally be added to the construction costs. You are advised to keep your residential address the same with the ATO, if moving back into your main Residence or if you have purchased a home and lived in it for 3 months before moving out whilst the construction works are underway. Most people continue to empty their mail box during the construction period. The ATO understands that you can t live on a building site. 8. If you do not intend to subdivide the land and subsequently sell, providing the property has always been your Main Residence, no Tax liability will arise. Naturally you could only ever sell the property to one entity and at the same time despite the existence of more than one dwelling on the land. Subdivision triggers the question of Original Intention and taxes will apply accordingly. 9. Be aware of the new Legislation regarding GST due on sale of new Dwellings, as there is now a responsibility on purchasers and a Liability on Vendors to ensure that payment is made upon completion of the Sale contract. 43

44 Why build with In House? In House regularly builds more than 230 dwellings annually for small investors and has done do so for years. We have highly structured systems that facilitate these processes seamlessly, reducing costs and time delays. At In House, we care about or clients and the outcomes that they rely on us to deliver. A high proportion of our business comes from referrals and this perpetuates our business and provides profit to the Directors and jobs for our dedicated employees. The money we save in advertising can be used to provide highly competitive price points, which in turn generates more business. We fully understand the value that happy customers can provide to us and that they will only support us, if we have reciprocated that value along the way. From the first point of contact we strive to make their interaction with In House pleasant and easy. Our site inspections, desk top audits and advice are all free. Our Town Planners confirm our findings and write a detailed report that can be relied upon, again at no cost to our potential customers.

45 Unlike other Building Companies, we encourage our customers to seek independent advice, before committing to a Construction Contract with us and can refer them to well known independent industry experts in the Legal, Lending and Town Planning Professions, who will prepare them well for the journey ahead. If these prospects subsequently become clients, we will reimburse them for the legal fees that they have expended for advice and structuring. Life is about expectations and when the expectations are not met, people become disappointed. We are in the business of ensuring that the end outcome is not a disappointment & assisting our Customers to navigate these extra challenges outside of our control is just part of the total journey. We have our own Real Estate arm and this can be deployed to find investment stock for KDR (knock down rebuild) purposes, or to source tenants for you and to manage your properties. Customers can rent out a granny flat to live in whilst we are knocking down their home and rebuilding. The rental cost for this period can be added to the construction cost if requested. As our name suggests, we tend to manage most processes in house. Once a commitment is made, you will be allocated a program manager to run your project and to liaise with you regularly. We can manage the pre construction site works, such as tree removals, pool removals and shed/garage removals. Our Architectural team organise the surveyor, civil engineering plans and specifications, BASIX Certificate, Sydney water stamp off and other documents required by the Private Certifier. They obtain the Complying Development Certificate, send you the Home Owner s Warranty (insurance) documents, arrange the mandatory inspections and manage the release of the Occupation Certificate. 45

46 Why build with In House? All that is expected of you is to attend and collaborate on the Architectural Plans at the front end, select your colours and finishes and make the progress payments when requested. You will also normally have to pay a Council S.94 payment during the course of the approvals process along with a Long Service Levy and a Council Bond (which is refundable). At the back end, we will complete a final clean and you will receive your keys and an Occupation Certificate and you can immediately insure your new dwellings. If we are arranging tenants for you, we will notify them to collect the keys from our office. We will also arrange for you, if requested, Sub-division Certification from the PCA for land subdivision and registration through the NSW Government Land and Property Services. Throughout the mutual partnership, 5 very important things are created. Firstly, we have built your project to accord with the signed off plans. Secondly, we have built a relationship with you that will endure. Thirdly, we have built trust between us; we know that valuable referrals and future business can flow from that trust. Fourthly, we have built a better future for our valued customers and their families. Finally, we have built a Brand and a Reputation for ourselves that will determine our own future.

47 As you can see, at In House, we understand that as Builders, we are building much more than dwellings. We fully understand that people don t care how much you know, until they know how much you care and we practice what we preach. We thank you sincerely for your time and interest to date and hope to engage with you on your next construction journey. The Team from In House 47

48 Call us on Or visit our showroom at 2/22 Hudson Ave, Castle Hill