All Topics / Help Needed! / Tax Problems

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of HappyTreesHappyTrees
    Participant
    @happytrees
    Join Date: 2014
    Post Count: 4
    May 23, 2014 - 2:47 pm

    Hi Guys,
    Just needing a little help with my tax situation.
    Currently working full time earning approx $75,000.
    Purchased house in Sep 2012, renovated, subdivided and am currently building on subdivided land.
    House is in my name.
    The plan is to sell both houses to purchase another two blocks and repeat the process.
    I feel like I am just going to have to tolerate being taxed when I sell because I haven’t set it up properly.
    When I purchase my next two blocks what kind of set up, (trust, business to write off my expenses against) would result in me being taxed less in the future.
    Thanks in advance,
    Nathan.

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763
    May 23, 2014 - 4:41 pm

    Hi Nathan,

    A couple of issues here…

    1. If you are doing this as a business (as you seem to have indicated above), then profits are ordinary income, not capital gains. This means that you will pay income tax on all your profit when you sell. Be aware that if your taxable income spikes in any one year then you will be pushed into a higher tax bracket. Some good tax advice would be well worthwhile.

    2. Remember that there will be GST on the new property. You ought to get good tax advice on this to ensure the amount of GST you have to remit is as low as possible. It may be there is specific wording needed for the sale contract to facilitate this (such as GST calculated on the margin scheme, if applicable).

    Sounds like a trip to the accountant is on the cards.

    – Steve

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of HappyTreesHappyTrees
    Participant
    @happytrees
    Join Date: 2014
    Post Count: 4
    May 23, 2014 - 4:53 pm

    Thanks Steve,
    In regards to point 1. I am doing this myself this time. I am asking if doing it as a business or a trust in the future will be more beneficial than the situation I am currently in, since I don’t have any dependants.

    Point 2 is well over my head haha. Know any good accountants in Geelong Area?

    Thanks,
    Nathan

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    May 23, 2014 - 9:28 pm

    We refer most of our Vic clients to Doug Mcracken at Ron Skeggs & Associates.

    Not Geelong but right side of Melbourne.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

Viewing 4 posts - 1 through 4 (of 4 total)

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