Taxes in NSW

Hi All,

I live in NSW and looking at wraping properties in NSW but it also means when I purchase property I am subject to approx 3.5% stamp duty and when I sell I am also subject to 2.25% of vendor tax, if I make any profit after that I’ll have to pay for CGT. (That’s a lot of taxes)

So if I want to wrap a property that is purchased at $300,000, I would have to add approx $22,000 just to pay for the cost of the property, taxes and legal. For me to make say $10,000 of contract margin over 30 yrs on the property after CGT (assuming at the 48.5% tax rate) I would have to sell the 300,000 property at the new price of $342,000. On top of that the wrap purchaser will need to pay the second 3.5% stamp duty on the $342,000 when they buy the property from me. This doesn’t seem to make the whole effort worthwhile because this will make the property at a price well above the market price and I will be paying more tax than the profit that I will make from this transaction. Any thoughts will be appreciated. [biggrin]

J.