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Building Duplex and structure advise

Discussion in 'Accounting & Tax' started by R.B., 28th Oct, 2015.

  1. R.B.

    R.B. Well-Known Member

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    Sydney
    Hi Guys,
    I got a house that can build a duplex in the back of the existing house while keeping the front house. I am planning to buy and hold for 2 years, and then build the duplex. After building the duplex, I am planning to keep the house and the duplex, but in case things don't go as I want. I may have to sell the duplex or 1 unit of the duplex.

    Can you please help me with your thoughts on the structure I need to have. I know that If I sell the new build. I will need to pay GST, but If I buy under my name, I will not be able to claim GST back. Can I do this down the track when I decide on the build?

    I am meeting with the accountant soon, and I wish you can help me with your thoughts.

    Thanks
     
    R.B., 28th Oct, 2015
    #1
  2. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    Impossible to advise on the limited info. See all my tax tips and legal tips where I have discussed structure.
     
    Terry_w, 28th Oct, 2015
    #2
  3. R.B.

    R.B. Well-Known Member

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    @Terry_w ,
    I went through the tax tips. It is very helpful, however, I couldn't find a similar case to mine. I read in the notes that GST needs to be considered if building and selling. I read also that outsourcing project management can help as passing some of the income to a different entity. my question is mainly regarding what I should do on the purchase. I will have time to prepare a good structure before building, but I do not have much time now.

    I am thinking of buying under joint names (myself and my wife). She have lower income than mine, we are both still below land Tax threshold.

    Hope this makes it a bit clear.

    Thanks
     
    R.B., 28th Oct, 2015
    #3
  4. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    Development is very risky. This will expose both of you. Can you service on one name only? Preferrably the one with the least assets.
     
    Terry_w, 28th Oct, 2015
    #4
  5. R.B.

    R.B. Well-Known Member

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    Yes, I can service on one name. all our properties are under joint names
     
    R.B., 28th Oct, 2015
    #5
  6. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    Consider leaving your wife off title and off loans and guarantees so that under a worse case scenario development fails you lose only your assets and not the assets of both.
     
    Terry_w, 28th Oct, 2015
    #6
  7. R.B.

    R.B. Well-Known Member

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    Sydney
    Thanks Very much Terry.
     
    R.B., 28th Oct, 2015
    #7
  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

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    Not sure how a title can be subdivided with an existing house and a duplex. NSW ?? Town planner might be the person to discuss this with.

    Complex GST issues if sold and valuation issues will arise.
     
    [email protected], 28th Oct, 2015
    #8