Forum Replies Created
You would return 1/11th of the margin not of the profit. And because you bought the property with gst initially. You won't be able to sell via the margin scheme. As this is only applicable to properties that were bought not subject to gst. So I this case your gst is going to be 1/11 of your total sale price. Ie you sell 5 houses each for 500k each. You'll be up for 45k per home. But your gst credits will include building costs, land division costs, initial purchase costs.
With your whole living with your son thing.
If you choose to say you are living there that's your choice. But there's nothing wrong with staying in your sons home him paying you rent you getting your deductions. If anyone asks your just there because your hot water service blew up and you need to have a shower everyday. Your PPOR is whatever home you designate to be your PPOR,
You could have a house in Queensland that has been rented out for 6 years. And you could be living away from home at your sons because you have work in his area or his state. As long as you to back to your PPOR within 7 years it can continue to be your PPOR.
By the way I will say this about your development. If you don't have enough profit that you can sell all three homes at 10'percent less then what you think they are worth. Then you should make sure you have your costs nailed down. You should be able to develop and sell properties into a softening market by cutting your profit just to make a profit at all and move on
Btw you said subdivide your property? And then said interested in a property that you can subdivide.
is it your property or a potential purchase.Is there any other possible point of entry?
Some standards that are seen in a number of councils are minimum 3m, And require 5 m x 5m entranceways and allow a taper down to 3m.
If you can't get the minimum requirement, perhaps purchasing the neighbors first 7-10m of there boundary could be a option.
Or be looking at the house directly behind and to both sides of you and perhaps a doorknock just asking if they would be ever interested in selling.
if you don't ask you'll never know.
Btw if the profit is there in subdividing your house. "Renovating your home" and moving a entire wall is not entirely out of the question.
or you could be on stumps and bearers. Can just jack it up and shift your house over 50cms.
I think he was saying instead of getting taxed at his nominal tax rate. Getting some paid into a company to therefore pay 30 percent. That's what it reads like anyway. Could be completely wrong with my interpretation
Q1- developers interests on loans are just expenses on their tax statement. So if you have more expenses then income you make a loss. If you worked part time this other income would be counted as income.
Q2 yes, can rent to anyone they own it, lots of children rent homes off their parents some at market rate and some below.
Q3 if you built the house you can do what you want with it you own it. If you rented the house to your kid then moved in technically you'd only be able to claim half the interest, deprication etc likewise if you had another person in there it would be 2/3 claim able.
Q4 once again, you built the home you can live wherever you like. If you want to roll all the profits from selling 4 houses and live in the 5th house with no debt that Is completly your choice
Q5 look up the multitude of posts on PPOR's and exemptions.
Q6 carpenters do this all the time they might build a spec home with intention to resell. Then the market is poor and selling isn't a option, so they move in, they do not claim the gst credits, or the refund if they have. It becomes their PPOR. And technically if they resold it after they could be still liable to pay profit, over getting their PPOR exemption due to intention. But then they would just claim it on owner builder if they hadnt done a project in the last 5 years
Ie say they were building to live in
Sorry guys I left my calcs on after the 50,400 for if it turned out to be a 4 unit site or a 5 unit site. Which was what it was last week until the building designer was told POS for each dwelling only had to be 11 sqm.
Can ignore that if you want.
Looks like it is coming along nicely.
Going to keep the 3 bed or the 2 bed home ?
I always prefer Option 2
For one thing. If you build the 2nd house on the back block. and you decide you want to rent it. You can usually get better rent then first home. You can get great depreciation because its a new dwelling which is great for cashflow.
and then you can go sit your test
and written references from 2 registered builders you have worked under. if you have only worked for the same company. a list of projects and jobs you have done.
Hey mate.
As a minimum.
Certificate 4 in building and construction (Can do at HIA or MBA) i think they have a discount due to government giving out education currently.
and 2 projects if you already have you carpenter qual.
I think its 4 projects otherwise.
A project is a different site.
if you built a duplex even though you did the work for both houses. It would only be one project.
Your qualification as carpenter will help you alot, should be able to get it in under a year. or if you did a fast track cert 4. Make sure it has the finance and legal modules.
Thanks Scott no mates you've just given me the brainwave I needed.
80 percent of rental income *
Even if you found a positively geared property it would have to be around 9-10 percent yield. Banks only consider on average 80 percent with some less and some smaller ones more.
You currently don't have much if any available equity in your current unit.
I would focus on building up a deposit for your first property. A 200k house purchase is going to need at minimum 12.6 percent of purchase costs to afford it. 5 percent stamp duty 5 percent deposit and 2.5-2.6 percent LMI at 95 percent providing not rural or remote areas. That's 25k.
Look at your family budget and as a suggestion if you work during the day. Perhaps your wife could look to get a evening job. If you use your wage to live and your wife was earning 500 a week in a casual job you will have a deposit saved up in a year. IIf you are getting tax back put that in as your initial amount.
Consider strategies where you might add value to the property after purchase in which you could potentially draw out some equity to repeat or to increase your rent
Your lending power will be the same if its though personal or through a trust. You cannot do what some books advised you to do in the past. In setting up a trust with your wage as income security and then when you reach borrowing maximum capacity, set up another trust and repeat. The banks are smarter now and credit checks can pull up your debts from everywhere. Plus you didn't have to declare if you were guarantor over debts, which shows up now.
What is your estimated current resale value of your unit?
If your could list your financial position. Ie equity, cash, incomes, how many kids. It would give a better picture for people to comment on a structure that would be appropriate. It then would depend on the type of property you would be buying. You might not want to place a highly negatively geared property with high growth opportunity in a trust. Simply because of negative cashflow that might not be realized for years. It depends on your situation.
Wouldn't have any problems at all provided you have had the necessary payslips from your new job.
Or one payslip and a letter from employer with your salary. Or a contract with your yearly salary.
3) even new property that is leased is still not except from gst Unless 5 years of continually leasing has occurred from the point in time when the dwelling was deemed habitable. ie when it was fully constructed. Also just not registering for gst doesn't mean he negates his liability for gst.
You whole argument to if gst is payable was if you person is either seen as a property investor or a developer. If this is the first time he has done a project like this. It might be seen as a realisation of cgt over paying gst. If this is the 2nd or 3rd time and he has done in in furtherance to running a enterprise type buisness. then most likely gst applicable.
But also, even if it was his first time. If his 'intention' was to then on sell the property after 3 months, 6 months 1 year then his intention would mean he acting as a developer/business owner and gst would be applicable. Although harder to prove what his intention was.
Banks limits or exposures to one individual or company are usually around the 1.5 million dollar mark. This doesn't mean you cannot borrow more then that with the same bank but they will begin to make things difficult for you and in some cases will outright refuse even if you have a perfect record of repayment history you have surplus cash flow and equity.
They might want you to change to P&I for some of your loans to start repaying some debt. Which is where switching new loans to another bank comes in handy.
BlueToffee wrote:90% is alot, really makes me wonder why the people i know who own properties havent done this? (parents etc)
Because there is security in keeping your Loan to value ration LVR lower , so you dont have to risk what you have earnt saved made or created if the market place went south.
You might begin at LVRS of 90 -95% To get you foot in the door. But that is not a place you would want to end up.
