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  • HamishBlair
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    September 22, 2015 - 12:39 am

    I will point you to the ATO guides which I am also perusing for same purposes.

    https://www.ato.gov.au/General/property/property-used-in-running-a-business/selling-commercial-premises/

    HamishBlair
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    June 30, 2015 - 10:10 am

    Thanks Terry – so if I buy for Market Value (per the ATO’s Market valuation for tax purposes provisions and Spencer v C’wealth 1907) for tax purposes, does this trigger Vic stamp duty.

    Or are they separate ideas i.e. love and affection for stamp duty and market value for CGT?

    HamishBlair
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    June 30, 2015 - 1:28 am

    In this case I presume any surplus cash (sitting in the offset account) can / will be applied against the loan on the PPOR while the loan for the investment property will be interest only?

    HamishBlair
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    June 30, 2015 - 1:05 am

    If the properties were held in separate trusts, would each trust get its own threshold?
    At what point does “grouping” occur?

    HamishBlair
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    April 14, 2015 - 4:24 pm

    @crj thanks.

    HamishBlair
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    April 11, 2015 - 5:04 pm

    I think this is where the GST margin scheme comes into play.
    The GST would be claimable on the construction cost.
    You then have to remit 1/11th of the uplift (i.e. the margin).

    For example land worth $300k, and construction cost of $250k + $25k GST.

    Claim the $25k GST back. So total cost of $550k.

    Property sold for $700k. Margin is therefore $400k. ($700k – $300k).
    GST payable on sale would be about $36k.
    So overall you have paid $11k of GST ($36k – $25k).

    Hope this makes sense and as usual get your own advice.

    HamishBlair
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    April 11, 2015 - 4:33 pm

    Just to clarify in this example, is the interest on the current IP (former PPOR) is deductible (and the interest assessable) even though there is no CGT (during the 6 year exemption)?

    • This reply was modified 9 years, 8 months ago by  HamishBlair.
    HamishBlair
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    April 11, 2015 - 4:21 pm

    So if I commence development, I can claim interest on the purchase of the land, plus the interest on borrowings for the progress payments to the builder?

    Can I get a PAYG variation for the expected interest (whcih will help with my cashflow)?

    HamishBlair
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    @hamishblair
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    April 11, 2015 - 3:42 pm

    Assuming the PPOR was owned by one spouse, could they sell to the other partner at Fair Value (stamp duty expection may apply e.g. in Victoria can do this for love and affection). Locks in the tax free capital gain and establishes cost base going forward.

    The transfer might help with getting finance which would be a good reason for doing so.

    In the original scenario one of the units will become the PPOR. Is the interest deductible on the whole or only part of the development during the development process?

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