Forum Replies Created
I recall reading that this was something that the ATO was aware of and there was a ruling against it. I am trying to recall where I read it and I think it was on the BANTACS website. I am sorry I cant be more specific. I think the reason was you were in a more tax advantageous position by being able to claim all deductions but not pay tax on gains if you were still calling it a PPOR. PLease let us know if you find out anything differnt.
MickAlso, I as under the impression that you would also be considered a currency trader and as such may need to pay tax on any profit earned as a result of the exchange rate, even if the property itself has not been sold and realised.
MickI attempted to have a 14 day settlement on one, in the end it ended up being 16 working days and I had to move the documents from one desk to another myself. Fortunately, all parties involved were located in the same area (Newcastle). I did end up haveing to pay a small amount of interest to the vendor but managed to have that split between the lender and the solicitor as I argued I had not held up anything. I think having the ignorance of first buy I did not really know this was not the norm, so didnt see why it was not possible. Just be aware if it goes over, what is the interest rate set at and how long will they give you before a notice to complete.
Mick
if you "gift" a property the recipient is responsible for paying stamp duty at the market rate for the house. Whilst your idea does attract interest, you may find it would actually cost the purshaser more.
I am guessing that you have increased the cost of 2 to cover the cost of 3 – yes? If this is so, the buyer would be paying stamp dutyon this higher amount for the two and then still have to pay stamp duty on the 3rd at market value even though there is no sales price. Also, you may need to consider what impact this would have tax (both now and CGT in the future) for your buyer. Of course, this is not your responsibility, but the more you are aware of potential drawbacks, the more you can tailor your sale to the investor.
Al lthe best
MickIn NSW, a contract is not binding unti it has been signed and exchanged. Until that stage, it is still a negotiation with the buyer able to pull out and the vendor able to sell to someone else even after offer and acceptance, hence some people think they have been "guzumped" even though they had not yet entered into a binding contract.
As always, please confirm with your own solicitor and this may differ in other states.
Mick
Oh back onto the topic, stamp duty would be payable in NSW as well
Oh back onto the topic, stamp duty would be payable in NSW as well
may I suggest that you start with something a bit smaller. You will learn all the requirements and still be able to sleep at nighthere is noting wrong with doing 3 x 300K deals rather than kicking off with 1 x 1M deal.
Just a thought
MickAnd in the same time period I have done the same and made a profit.
What is the difference? Perhaps it is good fortune but more than likely it is all the hard work I put into the Due diligence PRIOR to investing in the property. But you know this, you just persist in being a negative voice. We dont all look at the property market with rose coloured glasses, however, there are plenty of us making a living out of property. It is not really that much different to going into any buisiness. Some will succeed and others will fail.
Mick
Honestly Scamp,
If you can't be constructive, please go away. We are not asking for rose coloured comments, and all are entitled to their own opinion, however, the purpose of the forum is to leave it having learned a thing or two. And I am afraid that your post was very rude and of little benifit. I respect that your opinion is different but there is no need to trash the author.
Mick
Hi Tony,
Without understaning what your end goal is, it is very difficult to offer an opinion. Have you sat down and put pen to paper and worked out what you want to achieve in 2, 5 and 10 years time? This is not a backhanded comment, but a very valuable way to make sure all of your plans fit in with your expectations. The more certain you are with your goals, the more you can concentrate on what investment suit that and minimise those that you regret. Once you have worked this out you will be able to see how each property would fit in with your overall goals, and then it will be clear which one is more suitable
I assume that you are intending to rent the unit, so a few things to throw into the thoughts
– interest on the unit is tax deductible, it is not on the land (until it is sold, then all expenses are used as a tax deduction).
– Land tax is different in the two states
– dont forget to factor in caouncil rates, insurance etcAll the best
Mick
Hi Steve,
Thanks for sharing
Mick
Hang on, if you buy it when he dies, who are you paying the money to?
Why dont you buy the property now with a nominal lease in place effetive unti he passes away. That way you buy the property at todays price and he gets to stay there until he dies, and can actually use the money in the meantime. This may invove agreeing on a reduced price as he may be there effectively rent free for maybe another 10-15 years (or maybe not?).
Mick
yes, but if the previous vendor was not GST registered (ie usual resi sale) then you may be able to apply the margin scheme (search ATO website for info). Also, as I was advised, if you make it a PPOR but it is previously documented that your intent was as an investment, then you dont get the PPOR exemptions. Watch out, check your figures and concult an accountant knowledgeable in this area.
MickTry a search for this on the forum. I know it has been asked before and there is a link to the ATO that would prove helpful. Alternatively, look up the ATO website.
Goodluck withthe move
MickWell that certainly leaves zero room for you to negotiate. Have you approached the priciple of the agency? What is the listed advertised price on your contract? Best to check that out first. If they have not honoured the contract then perhaps you can terminate the agreement (or at least threaten to) based on them not fullfilling their stated obligations. There may not be much point in threatening if you are not prepared to walk as you may only end up with a p*&^^%d off sales agent.
All the best and let us know how it goes.
MickHI Trustie,
How did it all work out? Did you end up purchasing this property?
Mick
Mot sure about the other states, but here in NSW, stamp duty needs to be paid within 3 months of the exchange, regardless of the length of the settlement. We had an 8 month settlement, opted not to pay the SD at time of exchange, and got it stamped ourselves at the Newcastle office at the 3 month mark.
Cheers
Mick"A building/pest inspection satisfactory to the buyer" has always covered it for me
I live in a house on the golf course, have just finished building a second and recently sold a block of land fronting the course. I am not a golfer. My estimation is that it would be about half /half golfer/nongolfer mix, predominantly owner occupier. Capital growth has been good, although slowed now, due to a new land release which will produce houses in the same price range. As this is a regional area, realistically, there are only so many buyers in the executive price range and when supply of these higher end homes went up, we saw a slow down on capital growth. At the end of the day, there are a limited number of houses that can front the golf couse, but you also need to be aware of the rest of the market in that price range. Even though I am not a golfer, i like to live here as I dont have that fenced in feeling, I can look at a large space without the need to maintain it.
Be aware that it is percieved as a very trendy market and as such there is a whole lot of keeping up with the jones' and that, combined with the influx of higher end properties is why we have made the decision to sell our golf front properties and purchase 100acres out of town. Here, locally, i feel that will have greater potential for capital growth. Gympie is an unfamiliar market and I suggest you look at who the market is (not just golfers), what they will pay, and what else is in that price range inthe area.
All the best
mick
