Hi Guys,
this question is really more poised to the guys, who do quick renovations and cosmetic jobs, but who do buying and selling investment properties, on say a turnover of 3 months..
how do you buy your properties in which structure, as you are forfeiting your 50% capital gain discount, for not holding the property for a 1 year period.
Buy —-> Renovate/Rejuvante —-> Sell —-> (REPEAT)
Would it be more ideally to do this under a company structure, as you will only be taxed at 30% or is there a better structure to do this, as you buying and onselling very quickly..?
the other way to do is Peter Spann’s, way Leap Frogging, and doing the revalue and refinance, but also im very familar with this strategy, though im more interested in a straight forward Buy, Renovate, Sell, Repeat
What is the best structure or entity to do this in..?
Cheers,
sisnot sure what would suit your own financial circumstances, advice from your accountant may be best.
We buy these kinds of deals in a discretionary trust. This allows distribution of the funds at your discretion. If there is a member in your family who is on the lower tax bracket for earning, you can distribute more to them and less to the people on the high tax bracket, hence minimising the CG from your investments. This is the extent of my very limited knowledge of trusts, Im sure someone else can explain it better or offer more suggestions.Cheers
Xenia
We buy properties in all conditions. Quick settlements, no agents required
[email protected]
phone 0412 437 582I agree with Dr X. I have discussed this with my accountant and he suggested a discretionary trust for the same reasons. You may not save any tax initially, but having a wide range of potential beneficiaries could help down the track. A company could also probably work if the shares were owned by a discretionary trust. But you never know, you may want to hang on to one long term and then the trust would come in handy.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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