Dear all,

Wondering if any of you have experience with JV with developer.

Total GDV breakdown as follows:-

3 corner terrace - 400k per unit = 1.2mil

66 intermediate terrace - 350k per unit = 23.1mil

18 semi d - 500k per unit = 9mil

Total GDV = 33.3 mil

Dev propose that landowner gets 6 semi d, 20 terrace, 2 will be corner. About 10.1mil in value.

This post has been edited by jason1986: Jun 24 2015, 09:30 AM

Definitely not viable. This is what happens when developer has not enough or no money to pay main cons or biz partners. They tend to contra off with unsold properties.

Profit sharing is the norm in this kinda situation.

6 SD = 6xRM500k = RM3mil
18T + 2C = 18xRM350k + 2xRM400k = RM6.3mil + RM0.8mil = RM7.1mil
Total = RM10.1mil

RM10.1mil/RM33.3mil = 30.6%
damn good deal wei!
normally land owners gets approx 15%-30% dependent on the land, and its status and its zoning and its restriction, etc.

but be careful about treatment of taxes!

the landowner wants houses instead of cash.

15% is too low unless it is highrise. for landed i think will be higher.

As for taxes.. GST ohhh GST.. headache.

land is agriculture. If not mistaken, they take it that landowner dispose off the property to the developer. Agri land no GST. Hopefully that is the case. Need to confirm with customs. emailed them before but no reply.

This post has been edited by jason1986: Jun 24 2015, 09:46 AM

Walao seriously ah??????? 😨😨😨😨😨

you left out one important thing. Land owner will have to absorb all input tax from construction and any fees involved.

Custom only recognized the lawful and rightful of this JV owner which is the land owner not developer.

Nowaday JV is unlike previous. cannot goyang kaki and wait to harvest.

If i were the land owner, i will take the cash unless the JV development is commercial or industrial

Yeah landowner should just take money and ciao.

Well, i would take the money and ciao also. But this landowner wants the houses to collect rental.

30% is quite standard agreement for JV deals.

then u have to remind him on the GST part.

it is not only his portion affected, its throughout.

says total construction cost is rm 27 million. Im basing on one of my current project

6% will be rm 1.6million

From what i read online, supply of agricultural land and supply of residential properties is exempt from GST.

If by entering into the JVA with the developer is considered a supply of land on the part of the landowner, then it should be exempt.

If it is taken that developer supplies the residential houses to the landowner as remuneration, there will be no GST also.

The only GST applicable is on the developer's part when they purchase raw materials and equipments etc for building the houses but because it is residential, they can only adjust on the selling price and cannot charge GST to the purchasers.

But end of the day, still very pening. No clear guidelines. Will have to check with customs.

Thats why, land owner become end user. last tier of tax from contractor, supplier, specialist, consultant and authority for all supplied goods and services.

I try not to confuse you with GDV hence im using TCC as reference.

Ultimate question is, does the contra value amounting RM10 million is worth the land cost after 2 or 3 years from now excluding the said RM1.6 million tax.

JV agreement is sensitive nowaday with all this GST come around.

you are absolutely spot on hence my closing statement that the landowner better do proper due diligence on the tax structure of the deal.
new JV structures butt hurt the landowner big time!

best to engage an experienced tax agent to structure the deal properly.

on paper, the deal is attractive.
but looking at the cost of the development, suspect it is not a prime area.
hence i would rather pegged it to % GDV rather than physical units.

thats true kochin kor. even my melaka JV project also last minute pull off due to this taxation matter.

market is bad, we just cant simply increase the selling price to recover the super premium easy money 6% to government.

CASH is king nowaday. Get the cash convert to USD and SG.

talk about tough time, peri kor, your company recruiting bor?
fat cat looking for job.
let me follow you cari makan, can?

my boss also tighten up cash flow. luckily a very penny wise boss, i believe can maintain our wages for next 2 years even without project running.

i also looking for jobs now. Eco world and law development is recruiting

Peri gor.., you got any on running projects at Melacca? Mind to share about the foreigner consent's stuff? As one of my client pull hand brake because cant submit consent as their project is high rise without strata title yet, hence bank cant release payment for foreigner buyer. Any jalan to settle this issue??

This post has been edited by Tavia88: Jun 24 2015, 11:25 PM