Do banks view this as income

[MTR]

Hi All

Am meeting with accountant soon, but am curious about this.
I sold 4 properties last financial year, 2 in my trust and 2 in personal names. These were flips, not developments where I have made profits.

My understanding is for the banks to view this as income, I need to consistently being doing this, not a one off, but this is 4 right? so would it be considered income?? very confusing to me

Thanks
MTR

 

[Jamie M]

Hiya

It sounds like once off, non recurring income.

If it was consistently demonstrated over a couple of years then it could be a different story.

Cheers

Jamie

 

[Brady]

You're sceptical, as would be the bank.

If it's not ongoing then it's not happening...

Even if you 'planned' for it to be ongoing, if it's the first year of this 'income' it's going to be tough. I don't think the development compared to renovation will be big impact, will be the profit and ability to show it's on going.

Would suggest overall application would could into play a lot... If it's the sole income you're relying on, not likely... LVR? LMI not likely...

 

[sanj]

If you're arguing it is ongoing then that's income tax you should be paying btw...

 

[Peter_Tersteeg]

Do it consistently over 3-4 years, then lenders will start to see it as a business and you may qualify for loans under self employed policy.

 

[MTR]

I have been buying and selling on and off over the last 4/5 years in personal names only and paying CGT. I think I need to revisit my tax returns and work through this.

My LVR 80%, no LMI

That's a nice way to spend the day NOT

 

[Rolf Latham]

guess thats what RAMS is for

ta

rolf

 

[Brady]

If you're arguing it is ongoing then that's income tax you should be paying btw...

I have been buying and selling on and off over the last 4/5 years in personal names only and paying CGT. I think I need to revisit my tax returns and work through this.

Cake & Eating?

 

[MTR]

If you're arguing it is ongoing then that's income tax you should be paying btw...

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Your right, wont argue this point, just need to be included as income.
My developments - I need to show 2 year profits, just about there.

 

[westminster]

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Your right, wont argue this point, just need to be included as income.
My developments - I need to show 2 year profits, just about there.

Be very very careful. If you make it look like income for the bank then the ato has evidence you are a developer not an investor. Proceed with caution and good advice.

 

[MTR]

Be very very careful. If you make it look like income for the bank then the ato has evidence you are a developer not an investor. Proceed with caution and good advice.

Yes, I know, but I am now a developer and if I have to pay more tax than I want to then so be it as I also need to ensure that I can secure loans to continue operating.

I know some developers that forgo some tax benefits to improve serviceability with banks.

I most definitely wont be moving forward without discussing this with my accountant.
Thanks