Hi everybody!
It’s very tempting for me to consider the following proposition which I may be in a position to do: Find a property that needs a facelift. Try to get 60 day settlement or more. Organize my renovation quickly and sell. In other words, a “renovation and flip” but you actually sell before settlement so you don’t appear as a buyer. New buyer’s solicitors exchange papers with the solicitors of the original owner, you collect your cut and Sayonara, everybody is happy, specially you since the tax-man hasn’t taken 43% of your profit.
Am I dreaming? Is this legal? And if so, has anybody out there done this or something similar?
How do such earnings get declared? If not illegal, any suggestions for a good solicitor in Melbourne Victoria that may facilitate the above?Please reply. Thanks!
Hi everybody!It’s very tempting for me to consider the following proposition which I may be in a position to do: Find a property that needs a facelift. Try to get 60 day settlement or more. Organize my renovation quickly and sell. In other words, a “renovation and flip” but you actually sell before settlement so you don’t appear as a buyer. New buyer’s solicitors exchange papers with the solicitors of the original owner, you collect your cut and Sayonara, everybody is happy, specially you since the tax-man hasn’t taken 43% of your profit.
Am I dreaming? Is this legal? And if so, has anybody out there done this or something similar?
How do such earnings get declared? If not illegal, any suggestions for a good solicitor in Melbourne Victoria that may facilitate the above?Please reply. Thanks!
Spoke to a solicitor recently about this and not to pour cold water on this double stamp duty applies in this and dont forget if you dont find a buyer your stuck bear in mind new purchaser must settle on same day as you called comtemparainious settlement
also you are at risk if sale doesnt go through as the vendor has the right to keep all costs you incourred in renovations
Risky srategy though objective well thought out in my opinion
I got caught out myself in a simalar venture and lost thousands in renovation costs as the vendor turned as extentions for settlement was required
suggest purchase renovate hold one year then sell on benefiting from 50% cgt discount
regardsEven if double stampduty can be avoided (as I believe is actually possible under certain circumstances) the transaction between you and the end buyer is likely to become complicated by the resentment rising up in the endbuyer about you making a large profit out of him/her !!
So better to pay the stampduty and have no hassles and problems.
Pisces133
Richardo
An option would be where you approach the vendor, outline what you plan to do, and offer to split profits with them when they do onsell. This way, you are not buying it, you are merely ‘carrying out the business of renovating’, and will reap the reward on sale. Perhaps less money for you, but if you take out stamp duty, CGT, and sale fees, it might just be worth it. In this instance, your profit would be declared as income.
Cheers
Mel
Hi everybody!It’s very tempting for me to consider the following proposition which I may be in a position to do: Find a property that needs a facelift. Try to get 60 day settlement or more. Organize my renovation quickly and sell. In other words, a “renovation and flip” but you actually sell before settlement so you don’t appear as a buyer. New buyer’s solicitors exchange papers with the solicitors of the original owner, you collect your cut and Sayonara, everybody is happy, specially you since the tax-man hasn’t taken 43% of your profit.
Am I dreaming? Is this legal? And if so, has anybody out there done this or something similar?
How do such earnings get declared? If not illegal, any suggestions for a good solicitor in Melbourne Victoria that may facilitate the above?Please reply. Thanks!
Spoke to a solicitor recently about this and not to pour cold water on this double stamp duty applies in this and dont forget if you dont find a buyer your stuck bear in mind new purchaser must settle on same day as you called comtemparainious settlement
also you are at risk if sale doesnt go through as the vendor has the right to keep all costs you incourred in renovations
Risky srategy though objective well thought out in my opinion
I got caught out myself in a simalar venture and lost thousands in renovation costs as the vendor turned as extentions for settlement was required
suggest purchase renovate hold one year then sell on benefiting from 50% cgt discount
regardsDear Always Learning[
]Thanks for your reply, as they say, if it sounds too good to be true it usually… Still, some of the other replies give me a bit of hope in doing things differently, have a look at them. It may all be a question of “massaging” the idea a bit more.
Thanks again,
Regards,
Richardo
Even if double stampduty can be avoided (as I believe is actually possible under certain circumstances) the transaction between you and the end buyer is likely to become complicated by the resentment rising up in the endbuyer about you making a large profit out of him/her !!So better to pay the stampduty and have no hassles and problems.
Pisces133
Dear Peter,
Thanks for your reply, you are right, paying the stamp duty and avoiding the stamp duties is probably one of the best ways to go to avoid hassles.
Regards,
Ricardo.
RichardoAn option would be where you approach the vendor, outline what you plan to do, and offer to split profits with them when they do onsell. This way, you are not buying it, you are merely ‘carrying out the business of renovating’, and will reap the reward on sale. Perhaps less money for you, but if you take out stamp duty, CGT, and sale fees, it might just be worth it. In this instance, your profit would be declared as income.
Cheers
MelDear Melbar,
“Carrying out the business of renovation” still sounds like a cool idea. I’ll certainly consider this option along with the others suggested to me by other members.
Thanks for your reply,
Regards,
Richardo[
]
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