I think it could be worse. The main residence exemption doesn’t apply where the property is held on revenue account even if you were living in it. Your intention at purchase was to buy build and sell and you took actions in this regard.

There is also no 50% cgt discount in these situations.

Also considered GST?

Sark0605 wrote:

I understand it is required so they can represent me in auctions ?

It’s one way of doing it but there are others. You could just sign the contract yourself, appoint them as your agent or they could act as your nominee.

I am not sure what you are asking but if you mean out down a 10% deposit by borrowing against other property then lmi will apply in most cases.

Probably would be deductible if your intention was to rent it at end of Reno’s. See Steele’s case.

It all depends. Cgt may not apply and you may be taxed as income under some situations.

No need for a valuation unless it was your main residence.

All holding expenses could be claimed in some circumstances while you are holding and renovating even though you are not advertising for rent but only where you intend to rent it out after finishing.

Not much else you can do.

Seek some tax advice on generating a capital loss and the ability to keep claiming the interest on the loan after the property is gone.

If your other properties are mortgaged to the same bank you have the risk of all monies clauses whereby you would have pledged these as security for all loans with the bank.

Best to seek legal advice before doing anything.

The bank won’t release the mortgage on the property unless what they are owed in full is paid. That will mean you can sell the property but won’t be able to settle unless you can either come up with the shortfall or convince them to lend you the money to pay them back.

Do you own any other assets?

It is certainly worth considering. There may be arguments for and against fixing though.

Benny wrote:

Hi Rickey,You wouldn’t be assessed for CGT on the new house until such times as you were about to sell it, and any CG Tax at that time would depend on “what else had happened between now and then”.
What are your plans for the OLD home though? Are you planning to sell it? It sounds like it might be CGT exempt based on your words – but I am not an adviser, so don’t take my answer as gospel. It also depends if it was your PPOR (Principal Place of Residence – or home) for the whole time since you bought it. If not, then there “might” be some CGT to pay when selling it, depending.
Benny

Not enought informaton to answer, but possibly exempt. But the existing house would then be subject to CGT.

Yeah, I would suggest you put the funds in an offset account attached to the loan used to acquire the land as this interest is not deductible. Don’t pay off the loan just yet, just in case you change your mind.

Actually as you are living in the unit you could also put the money in an offset account on this loan while it is non income producing and then move the cash over to the other loan once you move in.

As neither loan interest is deductible atm, the loan with the highest interest should probably be offset for now.