Hold off paying out bond til the report comes back. The report may say that faulty wiring in the house caused the fire, in which case I doubt you would be able to hold the tennants bond. It may come back that a tennents heater caused the fire, in which case you may be able to claim the bond payment. Either way, wait til you get the report, because this is what will indicate the true cause of the fire as opposed to speculation at this stage.
Burnt to the ground - RIP IP
- Thread starter primaus
- Start date
Hold off paying out bond til the report comes back. The report may say that faulty wiring in the house caused the fire, in which case I doubt you would be able to hold the tennants bond. It may come back that a tennents heater caused the fire, in which case you may be able to claim the bond payment. Either way, wait til you get the report, because this is what will indicate the true cause of the fire as opposed to speculation at this stage.
I'm no accountant and am too lazy to look up the answer, but;
There might be some CGT tax implications if you sell the IP as vacant land without a premises. This may be relevant if at any stage you're claiming it as your principal place of residence for exemption of CGT.
If I'm off the mark, forget what I said.
There might be some CGT tax implications if you sell the IP as vacant land without a premises. This may be relevant if at any stage you're claiming it as your principal place of residence for exemption of CGT.
If I'm off the mark, forget what I said.
Assuming the $300K is tax free, from a tax perspective taking the cash + selling the land may be a way to avoid CGT...
as an example
Purchase price = $500,000
Current value with a house on it = $850,000
CGT liability = $175,000 ($850,000 -$500,000/ 2), Tax payable at 38% = $66,500
or
Purchase price = $500,000
Current value without a house on it = $500,000
Insurance Payout = $300,000
CGT liability = $0 ($500,000 -$500,000/ 2), Tax payable at 38% = $0
I'd check this out with an accountant first....
but if the value of your land + house = Value of your land + $300K I'd be looking at taking the cash and selling the land.
as an example
Purchase price = $500,000
Current value with a house on it = $850,000
CGT liability = $175,000 ($850,000 -$500,000/ 2), Tax payable at 38% = $66,500
or
Purchase price = $500,000
Current value without a house on it = $500,000
Insurance Payout = $300,000
CGT liability = $0 ($500,000 -$500,000/ 2), Tax payable at 38% = $0
I'd check this out with an accountant first....
but if the value of your land + house = Value of your land + $300K I'd be looking at taking the cash and selling the land.
But this is not the case. Destruction of a capital asset is a CGT event C1.
did not know that, gee the government gets to tax you under any circumstance the buggers!
Agree with Terry. Consider the Tax on each option.
In fact get an Expert independent to advise you on tax.
Peter
Do you want the positive cash flow that it will likely give after building the townhouses (supposing the council give you DA), or was it only a stepping stone to CG and youre not fussed about the area etc?
If you sell and pay down debt to sell the block, youre likely to pay stamp duty and transfers etc to aquire another when you decide to go again...
Clearly the same profit regardless of which option must weigh heavily on the final decision; but remember how hard it is to generate positive cash flow property ATM in a capital city market!
If you sell and pay down debt to sell the block, youre likely to pay stamp duty and transfers etc to aquire another when you decide to go again...
Clearly the same profit regardless of which option must weigh heavily on the final decision; but remember how hard it is to generate positive cash flow property ATM in a capital city market!
