Good news on the GST front. I don't like negative gearing either but I am negatively gearing my development site until I can start construction. You are right, I am losing money until I can started with the build.As this is my first development GST isn't applicable. However, 'CGT' would be if I were to make a profit from the sale. Which I won't so I will get a tax deduction
I have never understood negative gearing... I would much rather make a big profit and pay lots of tax, than lose money but not pay any...
Blacky
Life - its not all beer and skittles
- Thread starter Blacky
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Sent you a PM.
I have never understood negative gearing... I would much rather make a big profit and pay lots of tax, than lose money but not pay any...
Negative gearing is not about losing money and not paying any tax.
It is a way of offsetting the costs of investment / making a profit. It helps you hold/fund an investment until capital gains are realised or an investment becomes cash flow positive.
For example. Say the loan amount is $1,000,000 and the interest is $50,000 (5% interest rate).
Rather than costing you $50,000 a year in interest, the ATO will return your marginal tax rate to you - ie. at a rate of say 50%, it'll only cost you $25,000 in interest.
Giving you a $25,000 lump sum return in your pocket either at the end of the year or in incremental amounts during the year if you submit an ITWV.
Did you look into claiming deductions on the bank interest/rates etc whilst the planning for development was in progress. Even if you have zero taxable income for the current year (because of overseas income being non-taxable) the 'losses' will carry over into subsequent years when you do finally have income (rent or salary) to declare.
At least this is my understanding regarding negative gearing.
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But what if you can't make profit straight away - say, because you need to construct a rentable building before generating income.
Or if a profitable (cash flow positive) rental becomes loss making (cash flow negative) because interest rates rise from 5% to 8% or there is an extended period of vacancy.
In these two situations the taxation system in the form of negative gearing helps offset the costs/expenses/losses.
A quick update for anyone still following
We are rapidly nearing completion. The brick pavers are as good as complete, which allows for the flooring to go in.
At the same time the remainder of the landscaping is being done, and then...well, thats about it.
Here are a few happy snaps from the last week or so (prior to paving completion)
The marketing is showing some very positive signs, however, most potential buyers are saying "we will wait for completion".
Definitely at the pointy end now. Interest costs at this end of the project certainly put a dent in the monthly CF.
I still think Westminster will pip me at the post though.
Blacky
We are rapidly nearing completion. The brick pavers are as good as complete, which allows for the flooring to go in.
At the same time the remainder of the landscaping is being done, and then...well, thats about it.
Here are a few happy snaps from the last week or so (prior to paving completion)
The marketing is showing some very positive signs, however, most potential buyers are saying "we will wait for completion".
Definitely at the pointy end now. Interest costs at this end of the project certainly put a dent in the monthly CF.
I still think Westminster will pip me at the post though.
Blacky
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Awesome Blacky. Looks great
Very nice, Blacky. Would love to know where you got the bathroom vanity. I'm presuming it's not a custom-made one - perhaps I shouldn't!
cheers
cheers
Im back in about a month or so - and was thinking of having a grand opening - I might plan it with Westminster and we can do a joint walk through as her place isn't all that far from mine.
Ill serve tea and scones - I think Westminster (thanks to D.T) is putting on the booze, drugs and hookers
Very nice, Blacky. Would love to know where you got the bathroom vanity. I'm presuming it's not a custom-made one - perhaps I shouldn't!
cheers
No - its def not custom made. Its a standard builders selection. Im not overly fond of it, but it will do. I hope you like it?
Blacky
I think Westminster (thanks to D.T) is putting on the booze, drugs and hookers
Im in.PM me the details.Thanks, Blacky. Hard to tell from the thumbnail if it's floor or wall mounted. If it's wall mounted and it had different basins I'd like it, LOL. But it's certainly fit for purpose! I'm looking for something streamlined and wall mounted for my PPOR.
cheers
Getting very close now.
All the paving/drivway is complete. The flooring is going in this week, and landscaping is starting. I would expect completion in about 2 weeks, with another week for site clean up. Right on time for my return
Heres some pics
All the paving/drivway is complete. The flooring is going in this week, and landscaping is starting. I would expect completion in about 2 weeks, with another week for site clean up. Right on time for my return
Heres some pics
Attachments
I suppose I had better go check on mine and see if anything has been done this week.
At this rate you'll beat me
At this rate you'll beat me
Final touches being completed now. Everything is starting to look good and completion will be by the 1st.
The valuer was in today so looking forward to seeing what he has to say next week (fingers crossed). Profesional photographer goes in on the second.
Here are some pics
Blacky
The valuer was in today so looking forward to seeing what he has to say next week (fingers crossed). Profesional photographer goes in on the second.
Here are some pics
Blacky
