We have signed on the purchase of a vacant block and were considering flipping it at it has already increased in value significantly. Settlement isn’t until early Sept. I was just looking at Steve’s book ‘From 0 to 130 Properties in 3.5 years’ and realised that stamp duty to sell and buy, settlement agents fees to sell and buy plus capital gains tax at 48.5% of profit (for owning it less than a year) will eat away at any profit we may have made. All those costs come to $30229. Unless I am not calculating that correctly.
Purchased land for $202000, can sell for $232000.
Flipping is not looking so attractive at this point.
Any ideas from those of you with experience in this area.Thanks
Debbrad[exhappy]Perhaps walk us thru your calculations as it doesn’t look right on the surface of it?
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Yes, doesn’t look like much profit will be left after all the expenses are taken into account. If you sell (sign contracts) 12 months or more after you purchased (signed contracts) you would get the 50% reduction is CGT, but this wouldn’t be much.
Maybe just hang on to it a bit longer.
Terryw
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Hi,
You’re right. Just build & make the profit then. I realised that from the sale of my 1st property that the break cost is 20% i.e. if the sale price is less than 20% higher than the purchase price, then I might as well keep my money in the bank.
Good luck.
Kum Yin
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