[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 11:28 am

Sounds very late in the piece like Terryw says.

For best results you should discuss your plans with your accountant, lawyer, & broker before executing.

Get prepared and organised for your next deal, paying stamp duty once is bad enough!

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 11:06 am

http://onewebforall.com/

Not a spreadsheet but an interesting little web app my partner put me on to.

http://forums.whirlpool.net.au/archive/1960486

"Hi all,

I have just done a mobile web for Australian Property Investor at:

http://onewebforall.com

The purpose of this tool is help investors on calculate: stamp duty, mortgage repayment and especially cash flow analysis via their mobile.

Could you please do a review for it?

Any comment is highly appreciated.

Thanks much,

Mobiweb"

I have no affiliations with Mobiweb, just thought it was a good app.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 10:57 am

Holding your property portfolio in multiple trusts can reduce your overall land tax bill.

In WA trusts are usually assessed for land tax on the WA property owned within the trust (and is not aggregated with land you hold in your own name).

With WA land tax the first $300,000 of land has a nil rate of land tax. Greater than $300k to $1M you pay 0.09%, $1M to $2.2M you pay 0.47% and so on…

So for example if you hold two properties in your name, each with land value of $500k each, you pay $630 in WA land tax based on $1M land value.

Now hold two properties, one in your name and one in a trust, both with land value of $500k each. You pay $360 in WA land tax based on $500k in your name ($180 land tax) and $500k in the trust ($180 land tax). So you save $270 per annum in land tax with a trust in this situation.

As your portfolio grows (hopefully into the millions) you can realise significant land tax savings if you structure your portfolio correctly, either by using multiple trusts and or investing in multiple states.

Always discuss land tax with your accountant or lawyer first, it differs significantly from state to state. I try stick to SA, which is similar to WA. As soon as I leave SA I like to dust off the books and ring the state Revenue office to confirm. Also the trust deeds need to be set up correctly.

NSW seems to be the devilish state when it comes to land tax planning as trusts generally don't receive a tax free threshold there. However, Macquarie Group Services seems to offer a NSW Land Unit Trust, which they claim receives a land tax free threshold. They only deal with accounting and legal professionals, but maybe get your accountant to look into it if you have a large portfolio in NSW. (I don't have any affiliations, I just hate land tax).

Also, when considering trusts you should consider the asset protection provided (or lack thereof) as well as any tax planning benefits.

Hope this adds value

Cheers

Richard

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 8:34 am

Also, it might be possible to add a portion of your interest paid on your PPOR into the cost base of the new land, thus reducing your capital gain. Talk to your accountant.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 8:25 am

Make sure you are undertaking the subdivision to realise the best capital value for the land rather than as a profit making undertaking. If you subdivide with the intention to make profit you don't make a capital gain, instead you make a revenue gain which you need to pay GST on.

Hold the land for 12 months to claim the 50% CGT discount (individuals and trusts only).

Keep good records of all the costs associated with the subdivision to add to the cost base of the land.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 8:12 am

What? Only $20 bills?

I was thinking Benjamins would be gracing your behind

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

November 1, 2012 - 7:35 am

Hi Steve,

I had a couple of thoughts about your situation.

What entity does your business trade and operate in? If you are trading in a trust you might be able to do something more tax effective with your $80k profit each year. Possibly distribute the profit to a company which can lend it back to the business with interest. In this way you only pay 30% tax on the $80k profit rather than the highest tax rate for individuals of 45%.

Purchasing an IO might knock you out as a first home buyer so you might miss out on the FHOGs if you buy a PPOR later. Check your state and federal rules.

Check with your accountant before taking money out of the business to place in your offset account. Depending upon your setup there could be issues.

Hope these points add value.

Cheers

Richard

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

October 27, 2012 - 5:52 am

Hi Ritchie,

Thanks for your interest. I have taken the document down for now.

If you would like a copy please send me an email and I will forward you a copy.

Cheers

Richard

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

October 1, 2012 - 11:52 am

Good point Terry.  Land tax line is currently for SA, think I will have to overhaul that line state by state.

Much appreciated.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

October 1, 2012 - 7:13 am

Just make sure everyone is aware of the risk.

Tax residency is very different from immigration/citizenship, if everyone plans ahead it should not be an issue, however things can change very quickly.

A disaster would be to have a snap decision that someone was to reside in India (for example, to look after parents or for a new relationship) and either have the SMSF deemed non-complying or being forced to sell assets in a hurry to pay out a non-resident member who is leaving the fund.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

October 1, 2012 - 7:02 am

Thanks for the feedback Shahin,

I've labeled SMSF has expensive, more so relative to the other entities. SMSF accounting and tax returns are often more complex and require an independent auditor by an approved auditor which all adds to year end accounting fees. Also I believe SMSF trustees are more likely to need ongoing advice to stay compliant with the SIS Act.

Thanks for the info re CBA & NAB, I'll likely try and add a "Bank Headache" category I think.

Professional image is often not a priority for investors. Professional image is more for business investors, who might be developing regularly or seeking a brand image down the track. Professional image can also factor in a tax office view of what operations are being carried on.

Thanks again

Richard

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

October 1, 2012 - 6:46 am

Do you and your friends have strong ties with India? Do you and your friends spend a lot of time in India?

A SMSF (trustee and majority of contributing members) must be an Australian resident to receive concessional tax treatment.

Make sure you plan ahead for the possibility that one or more of your friends decides to reside in India.

http://www.cleardocs.com/clearlaw/superannuation/smsf-members-overseas.html

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

September 13, 2012 - 12:57 pm

Having trouble sleeping? Read a tax ruling

GSTR 2003/3 – Goods and services tax: when is a sale of real property a sale of new residential premises

http://law.ato.gov.au/atolaw/view.htm?docid=GST/GSTR20033/NAT/ATO/00001

EXTRACT:

Criteria for substantial renovations

60. Whether renovations are substantial is to be determined in the light of all the facts and circumstances.

61. We consider that for substantial renovations to occur for the purposes of the GST Act, the renovations need to satisfy the following criteria before it is necessary to make further inquiry to establish whether the renovations are substantial:

    (i)

          the renovations need to affect the building as a whole; and

    (ii)

          the renovations need to result in the removal or replacement of all or substantially all of the building.

62. Where one of the above criteria is not satisfied substantial renovations have not occurred and no further inquiry needs to be made.

Substantial renovations need to affect the building as a whole

63. Under this heading we discuss the concept of a building in its entirety, works on surrounding land (for example, curtilage) and additions to the building.

Building in its entirety

64. Whether substantial renovations have occurred should be based on consideration of the building in its entirety, that is the building as a whole, and not by reference to specific or individual rooms in the building. For renovations to be substantial they must directly affect most rooms in a building. The renovation of only one part of a building, without any work on the remaining parts of the building, would not constitute substantial renovations.

65. For example, the owner of a large 4 bedroom house removes the wall between two bedrooms for the purpose of creating a large bedroom with ensuite. The former door to one of the bedrooms is removed and replaced with gyprock so that the newly created larger bedroom can only be entered by one doorway. The room is repainted and recarpeted. Although significant, the work does not constitute substantial renovations as only one area of the house is affected.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

September 13, 2012 - 12:37 pm

Terryw wrote:

Many trusts offer these same advantages.

For example to avoid vesting, just set up a company trustee and trust in South Australia. Wait 80 years and see if it works.

Made me chuckle, thanks Terry

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

September 13, 2012 - 12:28 pm

Definitely talk to your accountant. On the face of it, looks to be capital in nature.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

September 13, 2012 - 11:53 am

Have you talked to your accountant about the level of your fees?

Is your accountant possibly doing more work on your MYOB file than you think? Accounting fees can always blow out on this.

Otherwise, for $13k of fees per annum I would expect to be getting a lot of personalised advice.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

August 23, 2012 - 7:32 am

Thanks for the info Lilian.

I was just referring to the original poster Astroboy71

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

August 23, 2012 - 7:23 am

What didn't impress you Liliian? Was is the same 'uneasy' feeling as Astro?

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August 23, 2012 - 5:28 am

http://www.businessspectator.com.au/bs.nsf/Article/BHP-wont-proceed-with-Olympic-Dam-expansion-pd20120822-XE94U?opendocument&src=idp

I think it is a real blow for SA. The expansion was an enormous amount of activity for SA. Personally I am not changing my investment plans, I just think we'll miss out on a Perth / WA like boom, at least for the time being.

If someone was speculating on land in SA to go through the roof due to Olympic dam they might have to wait a while longer yet.

[Kohlhagen GroupMember@kohlhagen-groupJoin Date: 2011Post Count: 58]

August 23, 2012 - 5:17 am

http://www.brokernews.com.au/article/blue-wealth-fires-back-at-mortgage-choice-60846.aspx?keyword=hayek

Mortgage choice seemed uneasy with Blue Wealth's vested interests too.