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That’s just the way it is. The govt likes to collect revenue and this is just another avenue. The stamp duty cost for a trust is $200 in NSW.
Terryw
Discover Home Loans
North Sydney
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Originally posted by AusProp:I’ll need to get hold of the legislation and read it as it coud be an interesting strategy.
Hi John
Look at Sect 118-145 of the ITAA.
Also see TD 51 and TD 95/9.Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I have a copy of the old kit. It has a some victoria specific information, but generally the concepts will be the same in every state. You will have to get your own contracts drawn up anyway.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
John
The legislation says nothing about having to move interstate or job transfers etc (nor does the link you provided). As far as I am aware, you could move next door and still claim the exemption.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am not actually sure, but after reading Richard’s comments, think it would be the original contract date, 12 June 2004 in your example.
You should be able to find something on the ATO site to confirm, or give them a call.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sonja
Did you live in this IP at any time? If so, you may be exempt from CGT altogether. agents fees are around 2 – 2.5% and legal etc should be under $1000.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
It is also possible the vendor will just let you out of the contract.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If this is your ONLY property, you could probably claim it as your PPOR and pay no CGT.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
TMA
You can also do that with a trust. There is actually a tax ruling on it when done using a unit trust (ie they don’t like it!).
I think Derek is right about the CGT issue. Pre 1985 properties will be CGT exempt no matter what – so you may still be able to class another as your main residence as well.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I did something similar too. Did you know you get get the best of both worlds? ie rent out your PPOR, claim deductions and rent somewhere else(which would be cheaper) and still claim the PPOR CGT exemption for up to 6 years.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You would be required to apportion the interest between each property as per the loan on that individual property. But the end result would probably be the same if you averaged them out.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Many are like that. I suggest you just put your offer in writing and see what happens. You might as well send a copy to the vendor at the address so you know they will actually get your offer.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I can understand Steve setting up his own broking arm, and am surprised that he didn’t do it earlier. It is his website so I don’t think we can complain about him advertising here – and it was just one post afterall. There are plenty of clients out there for brokers, so I don’t think we have anything to worry about really.
btw. I have made over 1600 posts here over many years and have only ‘found’ about 6 clients from this website.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by xxx:Originally posted by kp:Hmmmm,
Great article…but how realistic is it to buy a property for $40k and have it increase 100% in 12 months, and then go back a buy two more at $40k each ?It’s VERY unrealistic, especially now that you’ll be seeing a correction in these cheap country properties within the next 2 years.
It may not be very realistic to expect this sort of return now, but it really did happen to a lot of properties a few years ago.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I would recommend Stuart at Pro Solution Pty Ltd. http://www.prosolution.com.au/
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree with Advisor. why bother trying to save a few hundered dollars (if that) on something that is so important. I have used cheaper conveyancors in that past, they are good at processing transers etc, but a solicitor is trained to spot problems with contracts. Using a solicitor on a purchase last year actually saved my butt!
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Orion
I would speak to your solicitor about this. You would probably want to get a proper document rather than one downloaded on the net.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Rob
My understanding is CGT only applies to the period you rent out the property (unless you use the 6 year expemption).
eg. If you purchased for $100,000 lived there for 10 years and then moved out and started renting it when it was worth $250,000. You then sold it a year later for $300,000. I owuld say the taxable capital gain would only be based on the gain during the period it was rented out – ie based on $50,000.
So it would be a good idead to get a valuation at the time you moved out to demonstrate to the ATO how you arrived at the estimated value.
But this is only my udnerstanding, I cannot cite legislation on this and am not an accountant, so may be wrong.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Trusts are cheap to maintain. You may need to pay account keeping fees, and accounting fees – but these would generally only be about $100 or so more than if you held the assets in your own name.
Companies have ASIC fees each year – about $250 from memory.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
In Sydney, I have heard of quotes from $8000 to $20,000 to demolish a house.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
