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From: Mike .
development - taxation scenario
From: Lionhound
Date: 24 Feb 2001
Time: 12:37:13
Slightly off topic, but for those interested in development any feedback on this scenario would be helpful.
Person X had an old investment property, demolished, subdivided and is owner-building a property that he plans to sell. Even though he is not a professional builder the profit on this is treated as a commercial transaction and taxed at marginal rate and he is also expected to charge the 10% GST on it also (which is a cost the builder will have to absorb).
I am trying to find out if either of this scenarios will help the tax bill that would be due.
1) Rent this property out for 1 or more years. When it is sold is it then subject to capital gains instead of that commercial transaction/income tax? Calculated from the cost to build and the land?
2) Change to this as primary residence? What is the tax departments criteria for judging this? What kind of evidence of being primary residence do they need ie. bills in that name, showing usage, mail redirected? How long must they live there? Is there a problem with then going back to your old primary residence?
Thanks for your contributions...
development - taxation scenario
From: Lionhound
Date: 24 Feb 2001
Time: 12:37:13
Slightly off topic, but for those interested in development any feedback on this scenario would be helpful.
Person X had an old investment property, demolished, subdivided and is owner-building a property that he plans to sell. Even though he is not a professional builder the profit on this is treated as a commercial transaction and taxed at marginal rate and he is also expected to charge the 10% GST on it also (which is a cost the builder will have to absorb).
I am trying to find out if either of this scenarios will help the tax bill that would be due.
1) Rent this property out for 1 or more years. When it is sold is it then subject to capital gains instead of that commercial transaction/income tax? Calculated from the cost to build and the land?
2) Change to this as primary residence? What is the tax departments criteria for judging this? What kind of evidence of being primary residence do they need ie. bills in that name, showing usage, mail redirected? How long must they live there? Is there a problem with then going back to your old primary residence?
Thanks for your contributions...
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