I have just bought a property that I would like to turn around for a quick gain in three months. I need some information on how capital gain tax will be applied to this sale. If I earn $30,000 this financial year and I earn an after tax profit of $10,000, how much capital gain will I incur?
I have bought this property with two other people. Should all our names be put on the title or is a company structure better for a resale within 12 months of purchase ?
How does financing work in three names? Do we have to jointly be able to finance the full amount or is it enough for one person to finance the whole amount even if title is in three names?
The contract is currently in my name or ‘nominee’.
Sorry for so many questions![blush2]
Ally
If you sell within 12 months there is no discount. So the gain less some expenses will be added to your income, and you will pay tax accordingly. Not sure what the % is for $30K.
If you use a company, then the tax rate is 30%. Consider a trust.
If title is in 3 names, then all 3 will have to apply for finance and each will be liable for the whole amount.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.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
Ally
I suggest you talk to a solicitor – if the contract is currently as you say and you transfer to a nominee you may be up for double stamp duty. If your vendor is willing you may be able to replace the contract with a new one that has the final names you want on.
Hope this helps
Cheers
[exhappy]Thanks for your input guys
I would suggest that CGT would not be applicable as you have bought with the pure intention of selling ASAP for a profit, so the full amount of profit would be assessable in your tax assessment. CGT is more for a passive investment when you buy a place, rent it out for a wile etc etc – talk to your accountant re this.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Auspro is right actually. There is no CGT within the first 12 months, just income tax.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.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
Hello Allymac
If I understand you correctly you have signed a sales contract in “your name or nominee” so at settlement it’s possible for you to supply whichever name (s) you want without any problems re sales tax. Correct me someone if I am wrong please.
It seems to me that if you buy using 3 names then the profits are divided by 3 for income tax purposes which seems a good thing to me. However, this is my first post and as previously advised, asking an accountant is always the best option.
Elkam
I think in most states you will find they have clamped down on this. Unless you have a prior written agreement (in Vic), then you would have to pay stamp duty again if you nominated a different person to the one on the contract.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.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 must be logged in to reply to this topic. If you don't have an account, you can register here.
