hi. if you buy a property let’s say for $100,000, do a reno, make a substantial profit. how do you minimise the tax so that there are some readies to roll over into the purchase of the next one? i have looked at the idea of trusts. wonder if there are other methods without living in the property? want to do this regularly.[?]
onwards and upwards
graisme
ps just moved to sunny downtown ballarat, didn’t realise that it featured in THE book!1. dont sell and have it revalued, then use the equity
2. make it your PPoR for at least a month
3. if partner has lower income do it in their nameHi guys
Gee Ballarat was cold this morning, i passed through at about 7.30am. Avid a trust wont help because the profits from a trust must be distributed to the benificaries, (or else it is taxed at 66% i think). Unless there is a partner or kids in lower tax brackets. just watch out with CGT because if you sell in the first 12 months then you don’t get the 50% tax free benifit. i’m in a similar situation just had a property done up in Shepparton with a good capital gains but now have to hold for 9 months more, decided to rent it out but when i go to sell it wont look brand new. A good way to do it is rent it out for 12 months then do the reno then sell and claim the 50% Tax free.
westanI would definitely use a trust. The absolute maximum tax you will need to pay will then be 30% (by distributing it to a company).
And if you do it often enough, you will lose the 50% CGT discount as the ATO will class teh properties as trading stock. You should get away with it for a while!
Terryw
[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
CRASHY your a genious.[
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A good way to do it is rent it out for 12 months then do the reno then sell and claim the 50% Tax free.westan
Fantastic idea man – I’d never thought of that. Providing that the renovation costs don’t increase too much over 12 months (which they shouldn’t)… [
]Of course the PPoR idea is great too – if you like the ‘renovation / PPoR’ game.
if you run your corporation and trust properly, you may not be liable for any forms of tax.
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