Forum Replies Created
Flipping generally needs very favourable market conditions or a purchase from a desperate vendor
If you look at the Act a cursory glance indicates that there might be a possibility of an exemption for up to 6 years as a PPOR if you do not own and live in another property. Suggest you talk to someone expert in land tax outside the Land Tax office
There are two things you need to do:
a. ascertain whether a contract has been entered into. What does your solicitor advise? How was their offer accepted? Have you signed anything?
b. look at what the terms of the contract are
Try Stuart Wemyss. I have not used him but he is a financial planner interested in property. He has a couple of books out – the Property Puzzle is his latest
You would need to look at the exact wording of the policy and get specific advice. The policy may also reflect Fringe Benefits tax requirements for your employer.
What's your exit strategy? This may work as a pure investment strategy, but with you both living in it what if you get on each other's nerves.
What's the problem if the person passed away in the house? Your solicitor should be able to ask the vendor's solicitor where the probate application is up to.
You're making a loss so that after tax 60-70c in every dollar is still coming out of your pocket. Why are you into IPs. If it is just for tax losses do osmething else like salary sacrifice into superannuation. Once your property becomes neutral or positive you don't sell, you buy an additional property which you can put $60 a week into
Can they get a deposit bond?
Yes to all your questions. Because the life of the trust can be 80 years you might want to include remoter descendants than your children eg grandchildren etc
Have you settled?
ladybird wrote:I was reading an article in the AFR from a few weeks ago. It stated that if you subdivide a property that is your PPOR and sell off a subdivision, you will pay CGT on that sale if that subdivision doesn't include your PPOR. Can anyone confirm if that is correct? My wife and I bought a property 4 years ago that is zoned R60 and is our PPOR. We want to develop the back of the property into two townhouses and keep the existing residence at the front as our PPOR. 1. If we sell the subdivisions either before or after development, will we pay CGT.Before development, Yes unless your PPOR is included in the contract After development Yes unless you are classed as a developer, bear in mind GST as well if you are a developer 2. Does the process of subdividing in itself trigger a CGT event, even if titles to the subdivision remain in our names (we are joint tenants of the existing property). No
3. Would having title to one of the subdivisions in my name only require CGT to be paid, as we are currently joint tenants?Yes If CGT is to be paid, how do you calculate the cost base of the part being sold. For instance we put up a garage in what will be one of the subdivisions which will be demolished in order to develop that block. Is the cost of that garage part of the cost base of that subdivision?Issue the notice to complete and then if settlement does not take place issue proceedings for specific performance ie a court orderr that the Vendor is to transfer the property to you under the contract
http://www.ato.gov.au/content/downloads/NAT14233_06.pdf
Possibly if you had bought in NZ before becoming a tax resident of Australia your cost base might be the value at the time you entered Australia http://www.ato.gov.au/corporate/content.asp?doc=/content/64155.htm
As you would have been declaring the income in your tax return there will be a red flag at the ATO once income stops being shown unless the capital gain is declared
Did you have the IP before you became an Australian resident?
In NSW if you are being allowed into occupation before settlement the insurance risk passes to you. One reason to consider taking out insurance earlier than settlement is the insurance companies often will not put the cover into effect for say 72 hours in bushfire or hail seasons
Yes your title is guaranteed, but how do you know the house etc is completely on the land title you are buying. You don't unless you get a survey.
I'm sure the taxation office will be happy to accept your declaration that you are a developer and tax you accordingly. But, with respect I don't think you're grasping the point several of us are making. Possibly if we use some figures it might be clearer.
Let's say your development gives you a profit of $50K for each side – total $100K
Non developer – moves into one side sells it later, no CGT assuming PPOR conditions are met. Moves into the other side $50K profit, less 50% discount, taxable capital gain $25K, added to your other income that year so depending on your income you will pay tax of somewhere between $8500-$12000 less any reduction for being PPOR after you sold 1st side
Developer sells one side $50K profit added on to other income – tax between $17-$25K
Sells second side – similar result.So to save $12K you declare yourself as a developer and pay $34-$50K. Still at least you're honest about your intentions. The only reason you'd want to be classed as a developer is if your development loses money so you can claim the losses
Criminal background for what? I had a tenant who'd done time for social security fraud. No problems
Get your lawyer to go through it with a fine toothcomb. From memory there were some articles in Australian Property Investment showing that strict compliance is necessary in Queensland
Is your name Cameron Ponzi? Nice piece of self-promotion.
