Forum Replies Created
Hey Terry,
I left stamp duty off that bit because I think Qld office of revenue allows all land as PPOR to be exempt from stamp duty under 550k value. As I would now own the 1 title in my own name, for my own house, I should escape the stamp duty !…I think :-s
You still confuse me with this selling stuff…..who am I selling it too?
I am building, then subdividing, then living in one……..so no GST???? LOL i am so dumb, I cant understand.
D.
Eddie, Terry and Richard,
Many thanks for your help on this. Your time and consideration of my issues is very much appreciated. I think I have one last post left in me before running to an account –
Just going to put your solutions in a basket for a second Eddie…………..Why is there no GST when buying as tenants in common?
A summary of the outcomes of this post below as I understand it! Who wants to confirm?????
– 3 Parties Purchase the land which will be developed.
– We knock down the old house, build three new ones.
– Split the land into 3 blocks each with a house on it
– We own one each.The outcomes –
1. Stamp Duty Payable on parent parcel – signing of contract
2. GST AND CGT Payable when we take a title each (lets say 6 months later by the time construction finishes)- payable tax return time and because of :
a) its new land; and
b) we are making a profit, and have not occupied any of the units as they are new, and we made a sale to ourselves within a year without living there, therefore no CGT discounts.Question –
Why is GST payable not on the land value only of each of the 3 blocks (not taking into consideration the house value) it seems fair to me as the government refers to new land, the houses are not 'new land'. They should not be able to calculate GST payable on the total market value of each lot (i.e value of house + value of land = free cash to Mr Rudd). Its double dipping….some how !Thanks team
Darren.Hi Terry,
Thats slightly expensive! No wonder Richard is saying dont bother.
I find it so difficult to comprehend.
If we buy the parent parcel as tenants in common.
Then split the block, creating 3 new titles, cancelling the old title ……………Your saying the government considers that to be a sale to ourselfs and stings us with GST? Regardless that we intend to live in them for over a year? Thats just nuts! I thought that if we use them as PPOR we should be exempt from the GST?
So 120k GST from sale – minus 80k GST Credits = 40k payable in GST (13 k each)
Then CGT – as we are going to own them for more then 12 months as PPOR and maybe hold them for investment – is CGT only payble when we sell them in 1 yr or 20 years time? or are you saying we trigger capital gains when we transfer the new titles to ourselfs at the start?
Bascially do I need to put 13k each for GST (40k) into the budget and also add 30k each for CGT (90k) or can I exclude CGT and pay it in whatever years time when I sell it to someone?
Obviously will have this firmed up by an account at later date, but my understanding of this is increasing and making me hate our govenment.
Thanks again.
Hi Terry and Richard,
Thank you both for your comments. It does not sound good, I have spent almost 2 full months putting this together, sounds like I should have started with the accounting first rather then development costs.
Basically every option will require stamp duty on the orginal purchase as well CGT and GST? The government makes it impossible for people to kick start a future for themselfs.
I think I am ok with th FHOG, the rules state you must not have 'owned and occupied' to recieved the grant. So if you dont occupy the parent parcel, just own it as investment, then when we take individual titles we should get the FHOG.
I liked the deed of partition idea, but no so sure we have that in QLD? never heard of it……….
I have looked at the ATO website, it does not have examples for me to use as a cost estimate. Can I ask you for a little extra help? Lets say the parcel was bought for 400k, land development costs were 100k and the 3 units cost 300k to construct so therefore each party had a cost share of 270k approx each and we all took a unit. The valuer says they are worth 400. What am I looking at, to add to the feasibility for each unit to cover CGT and GST?
Its ridiculously confusing.
Many Thanks
Darren
