Dear forumites,
I am not sure this is the right place to post these questions
I am thinking about buying a SOHO apartment. It is zoned as mixed use. The REA told me that I need to get it rezone if I want it to be purely residential. At this stage, it has kitchen, bathroom, toilet, diswasher etc (except the washing machine)… as it is used as a office/studio.
What is the risk of purchasing SOHO? Has anyone experience of this kind of home office?
How do I claim the GST as it is treated as commercial property?
If I purchase it under Discretionary family trust, I am still be able to claim the GST?I believe that it is below market value and it is a brand new unit with lots of depreciation
Thank you
Yenny
Why do you want to change the zoning? – mixed use is much less restrictive than residential usage. A spot rezoning will take 6-12 months minimum, longer if the council has no intention of changing the zoning or is currently reviewing the LEPs (many of Sydney's councils are doing this at present as a requirement of the State Govt). You may be required to engage a town planner either for advice or to prepare the application. So – just confirm with council & body corporate what uses you are able to put into the property before committing.
Re GST – if you are not registered for GST, fall below the threshold ($75k turnover) etc you may not be able to claim the gst and it will form part of your cost base. GST applies as it is a commercial property, it is not a going concern (it is currently vacant possession) – you may need to confirm with the ATO website the requirements for claiming the gst. If you are leasing the property to a residential user, you won't be able to pass on the gst. Likewise, unless you are renting the property out, you cannot take advantage of the depreciation allowances.
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