All Topics / General Property / Taxes in NSW
Hi All,
I live in NSW and looking at wraping properties in NSW but it also means when I purchase property I am subject to approx 3.5% stamp duty and when I sell I am also subject to 2.25% of vendor tax, if I make any profit after that I’ll have to pay for CGT. (That’s a lot of taxes)
So if I want to wrap a property that is purchased at $300,000, I would have to add approx $22,000 just to pay for the cost of the property, taxes and legal. For me to make say $10,000 of contract margin over 30 yrs on the property after CGT (assuming at the 48.5% tax rate) I would have to sell the 300,000 property at the new price of $342,000. On top of that the wrap purchaser will need to pay the second 3.5% stamp duty on the $342,000 when they buy the property from me. This doesn’t seem to make the whole effort worthwhile because this will make the property at a price well above the market price and I will be paying more tax than the profit that I will make from this transaction. Any thoughts will be appreciated. [biggrin]
J.
The awnser is dont do it in NSW. I know some builders doing a three years lease to purchase at around 9%. They use house and land so the stamp duty is not alot. Pm me if you want more details
Nigel Kibel
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I live in Sydney, I guess it’s just easier for me to start from NSW. It will have too much travel cost if I am investing in other states plus I won’t know the areas as well.
J
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