selling before settlement

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From: H T


folks

I bought a little apartment off the plan in stkilda 18 months ago with the intention of moving into it, ie my primary residence. Since then my circumstances have changed and i wish to sell before settlement in 3 monthsish. The problem is this flat has gone up maybe 20% on purchase price so how to i convince the taxman that the property i purchased i intended to live in without the proof - like a owner-occ loan, gas bills etc. to avoid cgt. I have since brought an ip that was always going to be an ip. Should i get a private ruling or is that asking for trouble...
ps.the contract of sale allows me to onsell before completion
pss i moved in with my girlfriend


thanks
HT

 

[WebBoard]

Reply: 1
From: Robert Longmore


is the unit a full payment on settlement type agreement?

 

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Reply: 2
From: H T


yep, its a full payment on settlement

 

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Reply: 2.1
From: Robert Longmore


sorry i couldnt answer your question, but i am curious on buying off the plan and reselling before settlement, or flipping i guess. Do you have to make any payments untill completion or is there an initial payment at the start of work or signing of contracts?

im not sure about yor question as i plan on investing in property through my company, and with the aid of my very good accountant, can minimise tax using the company rules etc. i am only a beginner in this game but i am interested in making profits from reselling off the plan type properties before settlement if it is possable.

 

[WebBoard]

Reply: 2.1.1
From: Dave


Hi,

I buy off the plan, but have not yet sold any of my properties. There are no progress payments to be made; just the initial 10% or 5% deposit, or deposit bond to that effect - whatever you negotiate. The balance is payable upon settlement/14 days after issue of certificate of occupancy. All the contracts I sign are on the condition that I reserve the right to on-sell prior to settlement. However, this does not remove me from being solely responsible for settlement. If I were to find a buyer, I'd need to be sure I qualified this buyer and was sure their finances checked out....otherwise I'd have to settle myself.

Have you found a buyer for your apartment yet?

Cheers,

Dave

 

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Reply: 2.1.1.1
From: H T


have i found a buyer yet,mmm, i guess with this market i expect a hundred woodducks to line up to sign on the line, as the demand is pretty substantial at present.
I was going to use an agent and advertise it the usual way - for priv.sale, but my real question is how can it be proved that i intended to live in it as my primary residence, cause i guess thats my responsibility to the ATO
cheers

 

[paulzag]

Reply: 2.1.1.1.1
From: Paul Zagoridis


Talk to your accountant immediately.

I'm not sure how you intend to utilise the primary residence concession. I invest through a trust/company structure so it doesn't apply to me.

But I thought
1) owner occupiers got concessions under the old tax system (by specifying a primary residence whether they lived there or not).

2) under the new tax system you get CGT discounts only after holding the property for 12 months, which you haven't.

Regards

Dreamspinner