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  • Profile photo of willwill
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    @will
    Join Date: 2003
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    April 30, 2004 - 11:39 pm

    Yes i see that no sale would not obvisously trigger CGT, however undertaking such an excercise with again as a example constructing 4 townhouses selling one to cover construction costs and holding the rest.

    The problem could arise as the original purchase price of the land bought 10 years was 100K (giving approx 25K base for 1 townhouse).

    Selling 1 townhouse for 300K with say a 150K construction cost keeping it simple would be CGT payable on 62.5K (50% of 125K)?? i’ll have to investigate further![cap]

    Profile photo of willwill
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    July 14, 2003 - 11:54 am

    Thanks guys,

    Yes it is the same old story really isn’t it, all part of the fun though!!!

    Cheers
    Will

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    July 14, 2003 - 11:50 am

    Hi Del,

    Another possibility, (one which we are considering) is if you have a trust set up, purchase a property in the trust’s name & rent it to you. That way you can have your cake and eat it too.

    Just a note I recently read something on purchasing a residence by a family trust and then the subsequent leasing of it to family beneficiaries in the trust. In cases such as this the deductions and income claimed by the trustee have been reduced.
    I just dug it out and the date is 1985 so maybe it is a bit old, however it goes on to say,
    In the meantime it should not be accepted in cases of this nature that the rent payable by the parents (or trustee who is beneficiary) is assessable income of the trustee or that the losses and outgoings attributable to the residence are allowable as income tax deductions.
    Maybe it has changed but something to consider
    Cheers Will[:D]

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    June 24, 2003 - 3:13 am

    Hey Nick,

    I’m interested in attending, see you there.

    Will

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    June 12, 2003 - 8:54 pm

    Thanks for the replies,

    Interesting topic, as i was aware OB licences have a particular life and cycle. I thought that you could only apply for one every 3 years. This being the case i guess one would have to look at purchasing properties where the work required was all internal and not major so that you would not be limited in the number of properties that you could do in a particular time frame. Heres the next one, what about installing a carport. I’ll have to ring the council and see what they say.

    Will

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    June 2, 2003 - 11:07 am

    Maybe some great opportunities could present themself as Andrew mentioned. Split equity loans, you could in effect ‘half wrap’ a property. Although there are many more issues to be sorted through on the topic! One to keep an eye on!

    Cheers
    Will

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    June 1, 2003 - 9:20 am

    Thanks Michael and Hilary,

    So from what you have written I can gather that as suspected GST would only apply to property value increases from July 2000 to date of sale if owned before intro of GST.

    More advice from my (NSW) solicitor and accountant – that if you buy a going concern, then there is no GST applicable – this will only apply to commercial rentals if they are fully let – the best kind.

    I am not sure what a ‘going concern’ means. Does what you are saying mean that if a CP is sold un-let then the seller will not have to pay GST and hence on GST for the purchaser, and if a CP is sold let then the seller and buyer will have to pay GST.

    Is there particular criteria which determines if GST should be payable on purchase and hence sale of commercial properties, i.e. is there a guide defining which property class GST applies to.

    Thanks
    Will

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    May 29, 2003 - 6:41 am

    Hi Stephen,

    You will find that the depreciation schedule for the building cost using your example of 100K in 1987, begins in 1987. As the on paper value of the property is depreciated to reach zero in 25 years @ 4% or zero in 40 years @ 2.5%. So you have around 8 years of depreciation left. This is also something to consider in your projected cash flow for the property. Yes 4% is good initially as it increases your cash flow however the amount of time these properties (1985 to 1987) have left to claim the building write off is reducing. And you don’t want to miss out on that write off in the future!

    Cheers
    Will

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