I hope to purchase a property from a vendor who is planning to retire shortly. They would like to delay the income until after retirement to minimise CGT expenses. Eg. If they are to retire on June 2006, receive the CG income on July 1, 2006, and reduce their marginal rate. What form of settlement would best acheive this. Is a delayed settlement (sign contract now and settle July 1) or an option to purchase (exerciseable from July 2006).
I would like to secure the property but not have my cash tied up (except a 5-10% deposit) and have no mortgage to repay for the next 9 months, which lets me do some preliminary work eg: architects, approaching builders etc.
I’m guessing an option would be best, especially as it would allow me onsell it with less Stamp duty and bank costs(but what are the CGT implications? Obviously don’t get the 50% CGT discount)
ThanksBecareful. For taxation purposes, the date of sale is the date of the contract exchange – not settlement.
Terryw
Discover Home Loans
Parramatta
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