[HouseofwealthParticipant@houseofwealthJoin Date: 2018Post Count: 7]

February 8, 2018 - 9:55 am

You should also consider which entity should acquire the property for tax planning purposes. A lawyer can advise whether the and/or nominee clause will work to prevent double stamp duty.

Either way the entity would need to be setup prior to entering into contracts.

You need a good lawyer in the state your in to advise on that.

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[HouseofwealthParticipant@houseofwealthJoin Date: 2018Post Count: 7]

February 8, 2018 - 9:39 am

Generally you could use the margin scheme in such a situation.

When you sell the purchaser and you must agree in writing to use the margin scheme.

Basically GST is calculated as 1/11th of the margin. That is difference between sales price and purchase price. Better than 1/11th of the sale price.

You may also be eligible to claim input tax credits during the development so that will assist with cashflow planning.

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[HouseofwealthParticipant@houseofwealthJoin Date: 2018Post Count: 7]

February 8, 2018 - 9:15 am

Re GST you will pay on purchase it will depend on the situation of the current owner.

If its held as trading stock by the current owner it may be subject to GST. If its a residential block that they have held for 10 years and merely has a house they lived in or rented for those years and they never had an intention to do anything more then they probably wont be subject to GST so you wont pay GST on the purchase.

When you sell you will be liable for GST.

Re the block with the land and existing house i believe it will also be subject to GST.

MT 2006/1 states

270. In isolated transactions, where land is sold that was purchased with the intention of resale at a profit (which would be ordinary income) the Commissioner considers these activities to be an enterprise. This would be so whether the land was sold as it was when it was purchased or whether it was subdivided before sale. An enterprise would be carried on in this situation because the activities are business activities or activities in the conduct of a profit making undertaking or scheme and therefore an adventure or concern in the nature of trade.

Do some tax planning re using the margin scheme on sale so you have an idea of your projected profits from the outset.

• This reply was modified 6 years, 2 months ago by  Houseofwealth.
• This reply was modified 6 years, 2 months ago by  Houseofwealth.

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[HouseofwealthParticipant@houseofwealthJoin Date: 2018Post Count: 7]

January 30, 2018 - 1:08 pm

correct. you need to do two things regarding depreciation.

1. get a copy of the depreciation schedule
2. work out the amount of Division 43 (capital works deductions) you have claimed or would have been able to claim since owning the property.
3. take the purchase price and allocate it between the Division 40 and Low Value Pool Items and the land and buildings.
4. take the sales price and allocate it between the Division 40 and Low Value Pool Items

there is generally no balancing adjustment for the Division 40 and Low Value Pool Items

Division 43 capital works are an adjustment to the cost base and will increase your capital gain on sale.

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[HouseofwealthParticipant@houseofwealthJoin Date: 2018Post Count: 7]

January 30, 2018 - 1:20 am

If a mortgage broker set up an smsf without providing a statement of advice as a registered financial planner under an authorised rep or license then they have committed a criminal offense.

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[HouseofwealthParticipant@houseofwealthJoin Date: 2018Post Count: 7]

January 30, 2018 - 1:03 am

Few things to remember as well.

1. Property must be held by an individual. Trusts and companies dont get the main residence exemption.

2. If used for income producing purposes it will be subject to partial CGT. Be careful if you have used it as a work office as it may be subject to partial CGT. But can use the small business concession to reduce any potential CGT.

3. Must be less than 2 hectares or again partial CGT.

No time limit for a property being your main residence but if it was for only week the question would be why and was it really your main residence.

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