Let the classic Latin wisdom of caveat emptor – buyer beware! – guide you in purchasing land. Always get professional independent advice and don’t sign any paperwork before you have checked with your real estate agent, solicitor and the local Council.
Most people will want water, sewerage, electricity and a landline phone connected to their block. If this has not already been done these connections can add substantially to the cost of building. Also check for internet access and mobile phone coverage, crucial if you are working from home.
Easements may not be easy
Vacant land may be subject to an ‘easement’ which means that part your property can be used by someone else for a specific purpose e.g. to gain access to underground stormwater or sewerage pipes. Easements can be minor or major and can affect where you build, your use of the land and its resale value.
Watch out for the ‘envelope’
Land in semi-rural subdivisions may be subject to a quaintly named ‘building envelope’. This makes house construction only possible on a certain part of your block, this may not be where you plan to build.
The Australian Taxation Department view vacant land in two ways: a ‘capital asset’ or ‘trading stock’. If you own vacant land as an individual, for private use or as an investment, it’s usually considered a capital asset. If you sell it you may need to pay capital gains tax. If you use your land in a business activity it’s trading stock and any proceeds from a sale are classed as ordinary income.
If you have a questions, or would like me to write on a specific topic let me know in the comments below…