Advantages/disadvantages of paying by cash for a grannyflat build

[htopg]

Hi,

One builder quoted me a granny flat build of $95,000 + GST $9,500.
He said that if I pay him cash, he will just charge $95,000.

What is the tax implication of this?
Can the cost of $95,000 still be depreciated over time?
From tax point of view, interests of $95,000 still count as expenses and rent from granny flat still count as income?
To me, it has advantage of shelling out less to get a granny flat.
What other advantages are there?
What are the disadvantages? (eg. need to take piles of $50 notes in a suitcase? )
Have you done this before?

Thanks in advance

 

[robboat]

He may take your money and run away.....is he a licensed, registered (competent) builder?

Is he happy to take cash on completion....?

How do you get any home owner warranty after you pay him....?

Regarding tax....there is a world of hurt waiting for the building trade with cash payments to avoid GST....see ATO annual target.

I suggest you pay the GST, check all his licenses (and contractors/workers) offer him progress payments and sleep well at night....

My 2c.....

 

[baby blue eyes]

Get another quote

 

[AlmostBob]

cospiracy to commit tax fraud
compliance?
no insurance
no warranty
no nuthin
later down the track the tenant of the flat has a problem directly related to the construction.. exxit, down the toilet

NOT a good idea

 

[Rolf Latham]

Hi,

One builder quoted me a granny flat build of $95,000 + GST $9,500.
He said that if I pay him cash, he will just charge $95,000.

What is the tax implication of this?
Can the cost of $95,000 still be depreciated over time?
From tax point of view, interests of $95,000 still count as expenses and rent from granny flat still count as income?
To me, it has advantage of shelling out less to get a granny flat.
What other advantages are there?
What are the disadvantages? (eg. need to take piles of $50 notes in a suitcase? )
Have you done this before?

Thanks in advance

I guess this a little different than a tap washer fix for cash.

I believe you would have an obligation to pay the GST component to the gov.

I know you arent alone in this contemplation, and I am certain that if the gov gets the guts to plug the cash economy hole, the average PAYG and company tax rate could come down 10 to 15 % of current.

The issue here isnt just the GST...........its the income tax component and a few other things, soif you are going to play this game the discount should be more like 15 to 18 %, not 10 %............but of course the builder wont play that game

ta
rolf

 

[devank]

How about... I would like to do an illegal activity to save some money. What do you all thing about it?

 

[Made_Man]

how would you claim depreciation on something you dont have a receipt for.

either way, if you decide to do cash make sure you workout a payment plan with him.

i would also suggest getting other builders to quote you. this guys already sounds dodgy

 

[james55]

how would you claim depreciation on something you dont have a receipt for.

You can use a quantity surveyor to prepare a depreciation schedule for you. Costs about $700 for a good one