Getting it right

[risingsun]

Hi All
I need some advice on how to get it right for an upcoming purchase.
Here are the details
My partner and I have put an offer in on a Future Rezoning Property North of Perth.
Our plan is to rent it out until the rezoning goes through and then subdivide and build a Triplex villa/townhouse and sell 2 out of the 3. We will require a new loan at time of the new development.
We already have 3 IPs
2 in my name
1 in partners
We both earn 120K PA

options are:

partner on title - partner on loan

partner on title - both on loan

both on title - both on loan

What are the tax implications of each option?
Any issues we may face in the future regarding the sales and CGT?
Any other experience you may have to help us get it right?

Thanks in advance

Any question or queries to paint a clearer picture fire away.
What would be the tax implication and CGT come time we subdivided and built

 

[Blacky]

Sounds to me like you are too late to be asking these questions. If the offer has already been made, whoevers name is on the o&a will be on the tittle.

Sounds like you plan on developing for profit. Therefore you won't pay cgt. You will pay income tax and Gst.

I suggest you call Terryw ASAP to sort it out before its too late (if not already)

Blacky

 

[Terry_w]

See my last 2 newsletters where I covered struturing purchases in personal names.

 

[risingsun]

Thanks Terry
I tried having a look on your website with no luck. I did sign up for the newsletters.
Are the newsletters on a thread in this forum? or on the website?


Sorry I'm a new to this. I am keen to read the back issue newsletters

cheers

 

[Terry_w]

Try
http://www.loan-experts.com.au/article/

 

[risingsun]

Thanks Terry
What a Great newsletter cheers

 

[Paul@PFI]

The trading stock CGT events need to be understood as well as the income tax implications of building for profit and the different way to account for the one planned to keep.

GST always applies to sale of new residential property. Even years later if its a keep....
There is no CGT on a build that is intended to be sold.

Sadly many buyers of property I speak to have already made their offer and agreed to purchase and fail to understand the tax impact...Its like buying eggs for $5 and selling them for $3. You wont make much money. But GST still applies to each sale. GST alone can often rip 10-25% out of profit. If the margin scheme can be used it can also be a problem too...Some acquisitions are barred from the margin scheme.

I wish SS allowed video...I should do a webinar on this issue post it on the site and avoid repeating it every three days. Terry can do same for the structuring issues too.

 

[Nem]

Great newsletters Terry, please keep writing

I am new to investments and since I discovered SS, I keep reading forums days and nights, its mind blowing!!! Thank you for all this smart people out there for sharing your expertise!!!

 

[Paul@PFI]

The GST issues should also factor into the plan.
- Margin scheme v's ordinary GST
- Apportionment basis
- Claiming GST on build...When , how etc
- Registration for GST

The entity / structure seems like it will need to register for GST.