Hello all. Im currently working for a firm that sells major developers off the plan investment property to clients. What I would like to do is
branch out and secure contracts on properties and on-sell them to clients seeking existing homes. From what I can see on this sight, if I secured an agreement for $300k and on-sold for $320k, I would be liable for capital gains tax and stamp duty? One person has suggested stamp duty would only be applicable on the deposit paid which seems odd….
Does anyone know what the implications are in securing a property with a Call Option/Option Deed – ie would I still have to pay stamp duty and capital gains tax? Very confused!Hi Tylee,
Whoever exercises the call option is liable for stamp duty. You can assign the option to the end purchaser, they exercise the option and pay the stamp duty, with the 20k spread in your example being an assignment fee. This fee is ordinary income as per the ATO and not statutory income (i.e. Capital Gains).
Regards,
David
Thanks alot David. So just to clarify, from what you have explained…. the $20k profit would be taxed at whatever my marginal tax rate would be, not capital gains? And only the assigned purchaser would pay the stamp duty? Would I have to disclose to the end purchaser what my original contract price was?
Would I have to disclose to the end purchaser what my original contract price was?
YES YOU WOULD HAVE TO.
Richard Taylor | Australia's leading private lender
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