Forum Replies Created
as far as the capital gains issue goes – I have done some more research and believe that this is now the case: selling a company title duplex is the same as selling shares in a company (i.e. normally you would be liable for CGT but not pay GST on any profit made) The difference perhaps with company title is that you can get a solicitor to draw up the constitution of the company to state that the only reason the company exists is to give 100% land usage rights to the directors of the company. There then seems to be a case that if the duplex is your PPOR then even though you would sell the shares, you would not be liable to pay CGT as the shares represent your ownership of your PPOR. Hope this makes sense…(hope even more that it makes sense to the tax man!)
I have found a good solicitor in Randwick (Andrew Dawson at Back Schwartz Vaughn) that has dealt with Company Title issues before and, along with a good accountant, should be able to get all of these issues sorted as much as possible.
Hi Satcha
Good to hear I’m not the only masochist trying to take a project like this on!
As far as who we will get to build our duplex – I’m not exactly certain. We have a draftsperson doing up some plans – we will then get them costed and get some building quotes to make sure we can afford to do it that way. If it all seems to be too expensive that way – then we will go with a masterton or similar. I too have heard people question the quality of masterton places – there are a few other out there that do duplexes etc so I would most likely try them as well.
In the end for us – it may come down to a price thing. Even though we are planning on living in the duplexes (rather than just selling for profit) we still need to afford repayments on the initial and construction loans etc.
Have you bought land already – gone through the Randwick council DA process etc? I am interested to see if we can help each other out with any information.
Good luck!
RichLooking into it a bit further – it seems that if I want to sell my half of the duplex, I would sell my shares in the company that owns the title to the land. I would still be liable for Capital Gains Tax but could be eligible for a 50% discount if I had the shares for more than 12 months?
Thanks for the advice guys. I will meet with my accountant next week and make sure he is OK with the figures. Looks like it should be OK to go ahead – I have run some of the figures through an excel spreadsheet/software called ‘Feasability’ and between my worst and better case scenarios I am looking at a net profit after selling costs etc of between 3% to 20%.
Further reseach into some extra costs come in as follows:
1. long service levy ($?)
2. Section 94 infrastructure contribution (Randwick council in Sydney) – approx $4500
3. DA costs of around $2200
4. Construction Certificate cost ($?)
5. Section 73 certificate from Sydney Water – $7500 for the application, the likely work to be done, certified project manager and an infrastructure contribution.I’m sure there are going to be more than a few extra hidden costs that I haven’t thought of yet as well!
Any ideas on cost of construction certificate and/or the long service levy!
Thanks Again,
Rich
