I have a question about tax relating to new property.
I own my own house, & used the equity in that to fund the development of 3 new units on a single block. They are all owned in my own name, no trust structure. I planned to hold & rent all 3, but circumstances have changed. They are a bit negatively geared, but not much as the developing created equity. I plan to hold & rent 2 of them, but not all 3, as it's too much negative gearing.
They're in high growth, inner suburb and likely to appreciate well over the ensuing years, but as a recent boom has flattened, probably not for a few years.
If I sell the unit now, I'll have to pay both CGT and GST & will make either zilch or even negative on it.
I'm looking for strategies, particularly how to minimise the tax payable.
Any ideas or comments?
Possible plans: Move into 1 unit (obtain valuation & rent out current home) live in it for a year so it's my principle place of residence (PPOR), and then sell (obtain valuation on previous home & move back in).
No CGT payable on unit sale (as PPOR) - can anyone offer an opinion on whether there any GST payable on the sale? I know GST applies to sale of brand new residential property, never sold before - but does it apply to PPOR?? If GST does apply, can I claim back the GST I paid on the building, even though not registered at the time?
I understand that the period while not living in previous home becomes an issue if I sell it, but I also don't plan to sell it for a long time, if ever.
Another possible strategy: Use equity in existing home to fund wrap properties into 'cells', with aim of making gearing at least neutral.
I own my own house, & used the equity in that to fund the development of 3 new units on a single block. They are all owned in my own name, no trust structure. I planned to hold & rent all 3, but circumstances have changed. They are a bit negatively geared, but not much as the developing created equity. I plan to hold & rent 2 of them, but not all 3, as it's too much negative gearing.
They're in high growth, inner suburb and likely to appreciate well over the ensuing years, but as a recent boom has flattened, probably not for a few years.
If I sell the unit now, I'll have to pay both CGT and GST & will make either zilch or even negative on it.
I'm looking for strategies, particularly how to minimise the tax payable.
Any ideas or comments?
Possible plans: Move into 1 unit (obtain valuation & rent out current home) live in it for a year so it's my principle place of residence (PPOR), and then sell (obtain valuation on previous home & move back in).
No CGT payable on unit sale (as PPOR) - can anyone offer an opinion on whether there any GST payable on the sale? I know GST applies to sale of brand new residential property, never sold before - but does it apply to PPOR?? If GST does apply, can I claim back the GST I paid on the building, even though not registered at the time?
I understand that the period while not living in previous home becomes an issue if I sell it, but I also don't plan to sell it for a long time, if ever.
Another possible strategy: Use equity in existing home to fund wrap properties into 'cells', with aim of making gearing at least neutral.
