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What price do i need to declare to tax office ?World Changer [323 Posts]  Hi there guys, Thanks alot Luke "Don't let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings" Terryw [6654 Posts]  So you have given a rebate? This is common and you must take the rebate into account - I am not sure where you would do this, but think the sale price would be adjusted down to reflect the actual price paid. Terryw   World Changer [323 Posts] Hi Terry, I didnt know it was classed as a rebate. What are you saying by you must take this into acct?
thanks man Luke "Don't let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings" Terryw [6654 Posts] Hi Luke Sounds like a classic rebate. Say you sell for $100,000 with a $20,000 rebate, then the real sale price is $80,000. Terryw World Changer [323 Posts] Ok thanks alot ! Do you know if i can declare the price received for the property (after rebate)at tax time In yr experience will the bank still lend on the higher price when finding out a rebate will be given on settlement? "Don't let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings" Yossarian [86 Posts]  I'd be careful....the buyer or their agent is endeavouring to commit a fraud. If they are prepared to lie to the bank (they are clearly going to hide the "rebate") or subsequent purchasers, I would be taking any of there other respresentations with a pinch of salt. To each their own, but I don't think it is ethical to facilitate someone else cheating - whoever they are cheating. I'm sure you would be pissed if you want to purchase a property and the val. came back OK based on previous (padded) sales and you were lulled into paying too much. That said, your direct risk is that, if the ATO conducts the appropriate searches, they will not match the sale amount you declare. When the ATO gets a hit, they are likely to look at all your taxation affairs - not just this transaction - and given they have investors on the radar this year..... World Changer [323 Posts] Hi Yossarian, i dont see how it is fraud ,as long as the valuation comes back at the contract price,i would have thought,but i could be wrong. Would love to hear from others who may have come across this???
thanks alot "Don't let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings" Terryw [6654 Posts] Hi WC lets think of an example. house sale price is $80,000, but the contract is bumped up to $100,000 with a $20,000 rebate if the settlement occurs by xx/xx/2008. Bank sends valuer out and he sees the contract price as being $100,000. He may value it at this amount. Bank then lends 80% which is $80,000. So the purchaser is getting 100% finance - with No LMI too. Bank thinks it is 80% LVR. That is why some consider it to be deceiving the bank. Back to the ATO side of things. You received $80,000 in the end, so you should pay tax on the $80,000 figure. BTW, the purchaser would pay more stamp duty in something like this. Terryw World Changer [323 Posts] Thanks guys for yr comments,
It brings up another issue as to valuations too, ,what has what a buyer is paying for a property got to do with what its valued at ???? I think its wrong that often you have to tell a valuer what yr actually paying for a property before they do a valuation. "Don't let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings" Terryw [6654 Posts] well, by definition the value of a property is what someone will pay for it - so it should be a big factor, but I know what you are saying. It is always possible to start at a higher amount and then get discounts after the valuation has been done. Terryw lordoftheundead [16 Posts] hi guys, i came across this thread and thought id add to it instead of starting a new one as its of a related topic. Q) as a buyer, is offering the vendor asking price provided they give a rebate instead of negotiating the price down considered fraud? the situation! some of theses are very close to cash flow pos but raising the 5-10% deposit is the problem to continue buying. so as an example: property for sale for 300000 seems a fair price but market has slowed and the seller is motivated and the property is cash flow pos at this price. i offer the 300000 provided i get 5% cashback i can put down a 10% deposit of purchase price from my own funds i have no intention of hiding the cash back from the bank and would be eligable for both a 90 and 95% lvr loan 1)if the bank sees the property as 300000 then i could 95% loan and the 5% rebate which was my depsit 2)if the bank sees it at the rebate value than i would put down 10% of the purchase price which would leave me with 95% lvr in te banks eyes on which it is happy to lend? any thoughts would be most appreciated regards pete lordoftheundead [16 Posts] i now understand that banks will usually take the contract price - rebate as the cost of the purchase for lvr. are the any lenders who will consider lending on the contract price? im also aware that point 2 on my previous post has no benefit to the costs involved compared with negotiating a lower price to the samevalue as the rebate. does anyone know of any alternatives to get around this? cheers pete Terryw [6654 Posts] fraud is a dishonest act done with the purpose of deceiving. Rebates are offered all the time for the sale of many products - i just bought a laptop with $100 cashback after settlement. If you tell a lender you are buying for $X, but are buying for $Y, that may be a different thing. You are deceiving the bank into lender more - and obtaining a financial benefit. I know of no lender that will lend based on higher of valuation or purchase price. There were a few smaller private type lenders who did this before, they may still do so, but the lvr was around 70% Terryw keiko [20 Posts] well will this work you buy house at $300k you pay stamp duty on $300k the vendor pays tax on $300k (if any) the banks loan you 90-95% on the $300k its also valued at $300k Yossarian [86 Posts] keiko wrote:
If it is a contractual obligation to provide the "gift" as a condition of initially paying $300K then it needs to be disclosed to the lender. You can dress it up any way you like but If it quacks like a duck..and walks like a duck...it's a duck |
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