Knockdown and Rebuild a New Home.
The knockdown and rebuild process is becoming more and more popular amongst people who are seeking to build a new home.
The knockdown and rebuild process is mainly used by people who want to remain living where they have lived for many years and simply involves engaging a builder who takes responsibility for demolishing your old home, clearing your land of all demolished building materials and then building a new home on the land you already own.
What are the advantages of Knockdown and Rebuild?
The main advantage is you do not have to leave the area you have become familiar with. After living in the same area for many years, you become familiar with the availability of public transport, the location of shops and restaurants, local council facilities and sports facilities.
Children do not have to leave the area, change schools and make new friends.
When you buy a new property (established or new) you have to pay stamp duty (tax) to the Government. The amount of stamp duty you have to pay the Government when you buy a property is based on the price you pay for that property. The higher the price you pay for the property, the higher the stamp duty you pay to the Government.
At the time of printing this article, stamp duty on the purchase of a property in Victoria is as follows:
On a $500,000 home, the Stamp Duty Tax is $21,970.
On a $750,000 home, the Stamp Duty Tax is $40,070.
On a $1,500,000 home, the Stamp Duty Tax is $82,500.
On a $2,000,000 home, the Stamp Duty Tax is $110,000.
On a $2,500,000 home, the Stamp Duty Tax is $137,500
Therefore, a major advantage of knocking down an old home on the land you already own and building a new home on your land is that you do not have to pay Stamp Duty Tax to the Government as you have already paid this tax when you bought your property. As can be seen from above, these taxes can be very large.
Be aware of claims by your neighbours when you knock down and rebuild.
When your home is demolished, and your land is prepared for building your new home (e.g. deep excavations for basement car parks), there is a risk that your neighbour’s home will be damaged. For example, if the excavations on your land cause your neighbour’s home to move (e.g subsidence) and the internal ceilings and walls etc. to crack, it is highly likely that your neighbour will either lodge a claim against you or your builder to repair their damaged home.
In order to minimise legal claims against you and / or your builder, it is recommended that you insist that your builder arrange a dilapidation survey of your abutting neighbour’s homes and land around their homes before any demolition work, vibration works or building works commence on your land.
Dilapidation surveys are a snapshot of the condition of your neighbour’s homes, before any demolition or constructions works commence on your building site. They record all pre existing defects (e.g. cracks in walls) in and around your neighbours home and therefore stop vexatious damages claims being lodged against you and / or your builder.
What else do l need to be aware of when l am considering knocking down my old home and rebuilding a new one?
There are many things to consider before, during and after knocking down your old home to build a new one such as:
When should l arrange for dilapidations surveys to completed on my neighbour’s homes? Who do l call?
How long does the knockdown and rebuild process typically take?
How do l know if my new home is being constructed properly, compliant with all relevant building codes, guidelines and Australian Standards?
Who do l turn to if something goes wrong or l am not happy with the way my new home is being built and finished?
Finalinspect has 30 years experience guiding and advising clients who are building new homes. We carry out dilapidation surveys on neighbouring properties and independently inspect new homes at all stages of construction. Call us now on 0408 132 152 for some free and friendly advice.