Forum Replies Created
Ooops!
It has been brought to my attention that it might have been a good idea to let people know where and when this event is being held… Sorry about that! [confused2]
Anyway I still have a couple of tickets left, so if you are interested or know anyone else who might be the get in touch with me by email or PM.
Date Location
SEPT 9 – 11, 2005 PERTH
SEPT 16 – 18, 2005 BRISBANE
SEPT 23 – 25, 2005 SYDNEY
SEPT 30 – OCT 2, 2005 MELBOURNECheers,
Greg.To sell an option you really need to have an asssignment and/or nomination clause in it.
You might get hit up for double stamp duty depending on which state you are in.
Greg
I am guessing Steve meant using delayed settlements (which defers Stamp Duty here in VIC). Check with your relevant state revenue office to see how it works in your state.
I think the lucky people in NSW get to pay SD within 30 days of signing the contract regardless of when they get the property.
Alternativley you could explore the use of an option to get the same result.
Or you can just not pay the revenue office the SD and wear the cost of their penalty interest. I have heard of a developer who was happy to do this as it helped his overall cashflow. Of course he paid the SD later when things freed up – but it allowed him to complete the deal.
Hope this helps,
GregI suggest you find a good accountant who specialilses in working for property developers or who does developments themselves. These guys know the in and outs of options normal tax accountants haven’t even heard of.
You could be liable for CGT, stamp duty and GST when you sell depending on how you go about structuring things and the state you’re in.
A consultation at $500 could be the best money you spend this year. I know of someone who avoided paying CGT by getting good advice – when other accountants couldn’t see a way out.
Greg
Property seminars are still tax deductible BUT as always very strict criteria apply. In this case the AAT ruled that the taxpayer was not conducting a substantial BUSINESS of property investing. It did not dipute that he was a property investor.
It is difficult for ordinary taxpayers to claim deductions for education expenses, unless they are already generating income in that area. The ATO has not changed its position on this.
Also just because you pay for something through your company does not make it automatically tax deductible.
In reality, because our tax system is honesty based, you can claim everything and anything you like – but on review your claims will be disallowed and penalties applied.
Cheers,
Greg.Not exactly SE suburbs but close enough and used by many of Melbournes’ wrappers (even the opposition!)
Highly regarded:
http://www.gatherumgoss.com/Cheers,
GregInsurance will NOT cover you if you are criminally negligent.
Imagine this: You are involved in a motor vehicle collison and another party ‘alleges’ injury and sues you. It is found that the tyres on your car are unroadworthy.
In this case your insurance company will run a mile and tell you that you’re on your own. In this case it doesn’t necessarily matter who was at fault in the accident.
Those investment properties in your own name are up for grabs.
Cheers,
GregIt would be cynical to suggest that getting people entangled in debt nice and early makes the little vegemites motivated members of the workforce… and the more workers the more taxpayers… So some might say it is a beneficial for our overall society.
Others might disagree…
Cheers,
GregAny thoughts on why a RE agent should be paid a percentage as opposed to a flat rate?
I wouldn’t expect a mechanic to charge me relative to the value of the car I drive…
Imagine if solicitors conveyancing was a percentage of the contract price! And, why not the removalists and carpet cleaners..
My point is most people and businesses work for an hourly rate.. So why is it that RE agents feel their fee should be associated with the contract price of the property?
Cheers,
GregHi Scissors!
As Richard pointed out you need to be aware of the Managed Investments Act (either to abide by it or avoid being subject to it). Obviously this is just a start and more legislation applies.
On another note if you buy with multiple investors via a unit trust or otherwise you should consider your asset protection strategy.
What would happen if one of the investors gets sued or goes bankrupt? Are the other investors in a position to buy them out ahead of creditors etc?
Somthing like that qould quickly sour the relationship.
Cheers,
GregHi Robert!
In Victoria that is exactly what it says in the Instruments Act. But there was reently a case that went through the courts where they ruled otherwise. After negotiations an agreement was reached and the details jotted down on a bit of paper. Then the seller (If I remember corectly) decided to back out as they realised they could get more fpr the property. The purchaser pursued it and they won – the court ruled that they had in effect made an agreement.
My point is: If you make a witten offer with no expiry then, in theory, the vendor can come back to you at any time and accept. Too bad if in the mean time you have purchased elsewhere. You are leaving yourself exposed.
I always include an expiry and I give a reason for it (ie I am looking at another property and if I don’t receive a response in 48 hours then I will submit an offer on that property).
It is basically a reversal of the RE agents game of ‘oh, we just received another offer on that house and while I can’t tell you how much it is, I can tell you it is more than your offer. And, just because I want to do the right thing by you – I thought I’d call and see if you wanted to submit another offer…’
Hope this helps,
GregI thought about it… But as the article says $75k turnover (not profits) is quite low… I hope to be making more than that [biggrin]
http://businessnetwork.smh.com.au/articles/2005/04/22/2089.html
Damien!
A similar question was aked a while back and, as I recall, people in the finance industy suggested paying back the debt at the minimum amount per week – not as a lump sum. They said paying it back as a lump sum would not necesssarily help you get approval for a loan. (Try doing a search for it).
You can still get a copy of your credit report from baycorp advantage for free – but they won’t post it until 10 days have past. While if you pay the $27 you get the report that day.
Cheers,
GregLike Derek said – This arrangement may be viewed as a scheme by the ATO. Under the sole purpose test a SMSF can not invest in anything that you, a family member or an associate gains any benefit from.
If the SMSF is buying units in a trust which owns a house, which is rented by your parents then I think you are skating on some mighty thin ice!
The ATO is all over this type of thing and have indicated that the sole purpose test is an item of focus for their compliance team.
By the way if your SMSF is found to be non-complying the penalty is 47% tax. This is NOT 47%instead of the normal 15% rate. It means the ATO takes 47% of EVERYTHING in the fund.
Get some very very good advice if you want to pursue something creative like this. I am not saying it can’t be done – probably can. But make sure you do it right as the penalties can be huge…
Cheers,
GregI agree with Terry – if you have an accountant set up a trust for you they will most likely either order it over the net or go to a legal firm that specialises in incorporating and selling shelf companies/trusts.
So basically they are just taking you details and placing the order on your behalf. So like you said this requires very little training or understanding.
As I understand it the costs of setting up a trust/company etc are treated as capital in nature (ie you can’t claim them unless you sell the business at some point).
Cheers,
GregBrokers please correct me if I am wrong but getting finance on a property less than 50sqm will normally limit your available lenders.
Also I remember a Residex report on Cairns units about 4 months ago and it was less than glowing. If I remember correctly they predicted the CG for Cairns units to be aound 0% for the next 5yrs.
Maybe they aren’t correct – but maybe they are… Time will tell.
Cheers,
GregHi George!
Sounds like you intend to skate on some mighty thin ice!
You need to consider the “Sole purpose” tests for SMSFunds. To sumarise this means that the investment must be soley for the purpose of providing for your retirement. If you or a related party/entity also benefits from the investment you have failed the sole purpose test.
An example is if the SMSF buys artwork and you hang it in your lounge room. This fails the test as you have personal enjoyment of the artwork. Same applies if the fund buys jewellery, which you/or your wife wears. Shares in a golf club or yacht etc which you personally use.
Anyway you get my point. The ATO are all over this sort of thing and will punish you hard.
They will deem your fund as being non-complying and instead of paying a benifical tax rate of 15% you’ll get to pay 47% tax on the total assets in the fund. (Be VERY clear about what this means – The ATO takes half of everything the fund owns!)
If you want to pursue this I recommend you get very, very good advice and I would start with Chris Batten. I understand you will need to be prepared to pay for his advice though.
Keep in mind the ATO have retrospectively changed laws regarding SMSF to cacth people who dabbled in the grey areas. So while it might work now – you might find yourself back peddling and selling at a possible loss in future to avoid penalties.
Good Luck,
GregIf the trust has only one beneficiary and that same person is the trustee (not a company) then I think you’ll find that trust does not exist in the eyes of the law. Otherwise yes the trsutee person can be a beneficiary (just so long as there are other beneficiaries also).
It is very common for shareholders (and directors) of the trustee comapny to be beneficiaries.
Yes the trustee company can be a beneficiary.
Two answer to your last question. If you buy an asset (property) before the trust exists you are going to pay double stamp duty in most states. Also from an asset protection point of view you are leaving yourself open to a challenge.
Best bet is to get the trust created and the deed stamped and then go shopping.
Cheers,
GregDo ring Tony Cordato as he does indeed know how you can resolve this problem.
Also, I agree with Terry these departments might have internal policy – it will always be written down and just because they do not publicly announce it does not mean they will not send you a copy if you ask nicely.
For example the Vic FHOG application includes a list of of Id you need to supply. My purchaser had lost his wallet and did not have the necessary ID listed on that form. On request the SRO sent me a long detailed list of items they accept, which don’t appear on the FHOG form.
Cheers,
GregI would ask the OSR staff to send a copy of the information they are referring to… Maybe the NSW OSR have recently changed policy… Either way you’ll know the true situation…
Or if you want to waste time try having a look around on the part of their web site that relates to the FHOG…
Cheers,
Greg
