Forum Replies Created
Your question is more complicated than you think. When you subdivide an IP block, builds a house on the back & sells it to make a profit, those actions are likely to constitute the carrying on of an enterprise. Refer S9-20(1)(b)GST Act. As the sale of the house will exceed $50,000, you’ll be required to register for GST. The sale of the house will not be the sale of a capital asset.
This is a very complicated area & you’ll need to check with your accountant.
Makes no difference if you sell to your own company or any other company/trust. For tax purpose, you & your company are two seperate entity.
In all property investment, it is the land that increases in value. I wouldn’t waste my time looking at units in Perth.
Your present tenants will never be happy with anything. If that’s how they are now, be prepared for much worse complaints & then they will start withholding rents as an excuse. I’ll get rid of them quick smart.
Hope you find this amusing as I did.
The Proxy Father
The Smiths had no children & decided to use a proxy father to start their family. On the day the proxy father was to arrive, Mr Smith kissed his wife & said, “I’m off. The man should be here soon.”
Half an hour later, just by chance, a door to door baby photoghapher rang the doorbell, hoping to make a sale. “Good morning madam. You don’t know me, but I’ve come to..”
“Oh, no need to explain. I’ve been expecting you.” Mrs Smith cut in.
“Really?” the photographer asked. “Well, good! I’ve made a specialty of babies.”
“That’s what my husband & I had hoped. Please come in & have a seat. Just where do we start?” asked Mrs Smith, blushing.
“Leave everything to me. I usually try two in the bathtub, one on the couch & perhaps a couple on the bed. Sometimes the living room floor is fun too; you can really spread out.”
“Bathtub, living room floor? No wonder it didn’t work for Harry & me.”
“Well, madam, none of us can guarantee a good one every time. But if we try several positions & I shoot from 6 or 7 angles, I’m sure you’ll be pleased with the results.”
“I hope we can get this over with quickly,” gasped Mrs Smith.
“Madam, in my line of work, a man must take his time. I’d love to be in & out in 5 minutes, but you’d be disappointed with that, I’m sure.”
“Don’t I know!” Mrs Smith exclaimed. The photographer opened his briefcase & pulled out a portfolio of his baby pictures.
“This was done on the top of a bus in downtown London.”
“Oh my God!” Mrs Smith exclaimed, tugging at her hankerchief.
“And these twins turned out exceptionally well when you consider their mother was so difficult to work with.” The photographer handed Mrs Smith the picture.
“She was difficult?” asked Mrs Smith.
“Yes, I’m afraid so. I finally had to take her to Hyde Park to get the job done right. People were crowding around 4 & 5 deep, pushing to get a good look.”
“4 & 5 deep?” asked Mrs Smith, eyes widened in amazement.
“Yes,” the photographer said.
“And for more than 3 hours too. The mother was constantly squealing & yelling. I could hardly concentrate. Then darkness approached & I began to rush my shots. Finally, when the squirrels began nibbling on my equipment, I just packed it all in.”
Mrs Smith leaned forward. “You mean they actually chewed on your, er….equipment?”
“That’s right. Well madam, if you’re ready, I’ll se up my tripod so that we can get to work.”
“Tripod?” Mrs Smith looked extremely worried now.
“Oh, yes, I have to use a tripod to rest my Canon on. It’s much too big for me to hold while I’m getting ready for action. Madam? Madam?……….Good Lord, she’s fainted!!!”
Share investors will recognise MAP as Macquarie Airport – 48% owner of Sydney Airport. For those who missed out on Steve’s MAP, well, you can now have your own MAP via the stock market.
You can get a copy of the title from your local Dept of Land Administration.
I use ST George Underwriting Agency. Their phone no is 08 93178400. They are quite reasonable.
I agree you’re better off to increase the price of the furniture. You save on stamp duty & you get a better depreciation thereby reducing your taxable income.
Today’s record low unemployment rate is an indication of the direction of interests rate and that is up. If we continue to get more good economic news, my guess is that we’ll get 0.25 increase within the next 3 months.
CGT is a Federal tax & therefore applies throughout Australia.
It is best you get a surveyor/valuer to provide you with a value for the subdivided backyard.
Agree with Simon. I think investors are starting to go back into the sharemarket. Just look at the number of penny dreadfuls that have moved & the amount of daytraders that have returned to the market.
I’ll take extra care when buying an IP. I’ll rather be cashed up at the moment.
Sounds like it’s the business that’s advertised for sale as stock is normally sold in conjunction with the business.
Cannot see why someone will sell a property with stock unless its a crop or tree plantation.
Don’t see why not as long as long as this is clearly specified as joint tenants.
Hi Tilly, I’m from Perth. Altho’ I’ve not had any loans through Stuart, I’ve emailed him a number of occassions. He is most prompt & very helpful. Just him a try.
Inter state travel is a touchy issue with the ATO. If you are there & back within a day or so, that’s ok. But if you stay longer without a really good reason, it’ll be disallowed. Suggest you also check with your account.
Michael, you’re basically entitled to the final product, so to speak, from your accountant. So it’s ok to ask for or copy if you have not received one already. However, workpapers belong to your accountant & are not normally given out. Hope this helps.
Apprentice, you have a point about CGT. It is likely the tax deductions claimed will be in excess of $1 billion for the 2003 financial year. That’s a lot of bickies.
As an alternative the Govt may allow losses to be quarantined & offset against the gain when the property is sold.
Hi Max1999
When you become a developer, your houses are treated as trading stock. You’ll have to pay tax on your profits. Makes no difference what entity you use as you eventually have to cough up.
Great post, Davide. As a counter argument to predictions that rents will go up if -ve gearing is abolished, it has been suggested that it is likely interests rate will drop thereby allowing more 1st home buyers to buy in.
As an add on to Davide’s post, those that are buying -ve geared IP without doing due diligence, are they considered speculators?
