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Congratulations – as a developer you do not pay CGT, your profits get added on to your ordinary income and you pay tax at ordinary rates – no discount no matter how long you hold the property. You've just eliminated your CGT completely. Your intention is to be a developer so you are taxed as a developer
10% CGT applies to capital gains in superannuation
I'm assuming your accountant has suggested that any expenses on the second property once you are living in it ie not deductible eg rates, insurance, interest will be added to the cost base thus minimising your CGT
You need a land surveyor for a subdivision plan. You may or may not use a qunatity surveyor to estimate the quantities of building materials you need when your building plans have been drawn up
You will not be able to access any of the cash unless you meet criteria such as over 55 and retired etc.
If you attempt it you will have major problems with your audit etc.
This type of question was raised on somersoft last week. http://www.somersoft.com/forums/showthread.php?t=56093
Hi Hopeful1 – as part of the usefulness of these forums is sharing experiences, are you willing to share on where you're up to so far
I think what you would find is that the notice period would have to expire after the end of the term of the tenancy and that our friend's fixed term has either expired and he is holding over or his term would be expiring less than 90 days after the notice was given.
The Victorian laws just give longer notice periods than the New South Wales laws.If you or your partner have not claimed any other property as a PPOR during the time of your ownership and you moved in to it as soon as possible after settlement and have not derived income from it then you can sell exempt from CGT as long as you are selling the whole property in one contract. The status of your DA is irrelevant to the CGT exemption.
If you are subdividing part off to sell then there is an added layer of complexity.
No. If the will says it goes to Fred and it is transferred to Fred's Family Trust there will be stamp duty and potentially CGT will be payable depending on the status of the property for the deceased.
A testamentary trust is set up by the deceased in the will, but the will doesn't come into effect until death so the testamentary trust doesn't start until then.
amazon196969 wrote:Hi All
I
While my partner and I have enough property between us to do this we don't feel comfortable if things don't go to plan, although I am 100% sure it will do better than the vendors figures show, as there is much room for improvement and this town is not suffering from the financial crisis.If you don't feel comfortable if things don't go to plan, bear in mind that the lender will have personal guarantees etc from you so your other assets can be at risk if it goes pear-shaped.
What is your exit strategy? If it's remote you might have a great deal of difficulty selling. If it's a mining town that will also affect your ability to obtain mechanics etc.
Unless you understand the town well, there might be factors affecting turnover/profitability eg employees vehicles might get filled at work or there is acontract with another fuel supplier or a contract with your petrol supplier fixing the rate that you get for certain customers.
Don't get me wrong I think there are great opportunities to make money in remote parts of Australia, but they are remote because people like their comforts
I refinanced out of Wizard a month ago. The fact GE wasn't lending any more made the inflexibility from not being able to access the increased equity worth paying the deferred estabishment fee
Real estate purcahsing is still buyer beware
Watch out for a deferred establishment fee
How long is your money tied up for?
It is because under common law once you have exchanged contracts the risk on the property passes to the Purchaser. In states where this doesn't happen it is because legislation ahs changed when risk passes
What are you trying to achieve and when do you want to have achieved it. Stuart Wemyss has a new book out The Property Puzzle which sets out and compares different investing strategies. http://www.prosolution.com.au/books/ppuzzle.htm
Well worth having a look at.
Then are you a passive investor or do you want to be hands on
Repayments of money when redrawn bear the purpose for which the money is used ie if you redraw 17K from your IP to your current PPOR the purpose is to repay borrowings for your PPOR so the interest on the redraw will not be deductible.
Best advice is: convert IP loan to interest only
set up an offset on your current PPOR – put additional money in the offset not off the loanwhen you move and buy another PPOR you can take the money out of the offset and put down on the next PPOR
The somersoft site has some very detailed posts by quiggles done a few years ago on his experiences investing in the states
cash on cash return – ie it is looking at the return on the actual cash you have put into the deal as opposed to return on the total cost of the deal including borrowings
Unless they'bve given you the title deed as well you won't be able to lodge it. Talk to your mortgagee and get it sorted out.
If it's done as a documented property settlement you can be exempt from stamp duty and he can be exempt from CGT. See a lawyer or a community legal centre
