House flipping.renoe'ing in the States, what taxes do the pay?

G'day people.
Have been wondering with all these US reno and house flipping shows , what sort of tax would also have to come out of their profit. ?
Which they never mention on the shows.
They show what they payed and reno costs , then sale price and profit , but they never mention tax.

lf we flip a house in a few mths here don't we have to pay something like 30 or 40% on any profit ?

One other thing l've been wondering , how come all the wives in these reno shows are such stunners ?
Hmmmm.
Do they all look like that over there .
Seems to be pretty consistent no matter which one your watching , or do they interview 500 renovators and flippers to get the one with the stunning wife.
Ahh the things that baffle the mind eh . !!!!!!!

 

stamp duty and income tax, GST possibly.

 

I think he means the USA.

 

oh yeah , of course they would tax us from Australia if we were doing it over there, heaven forbid , the horror of an aussie making one penny anywhere and not paying tax.

But no , l mean the Americans in these shows or anyone else over there for that matter flipping houses.
Wouldn't they also have a tax coming out of that profit , and other things ?
And how much tax are they paying when they flip a house ?

 

No stamp duty

 

Everyone has to pay tax. Just have to make sure you use a good US tax accountant, as US tax laws are complex and as foreigners just adds another layer of paperwork. I have been using the same US accountant since 2011 and he is brilliant, understands Australian Trusts etc.

Its pretty amazing that foreigners can buy property in US no rules apply, as long as you have the cash. We are not so relaxed about this in Australia.

We are currently using a number of strategies in US at the moment, developing property and also flipping, just flipped out first property which made just tad over 40% net

Atlanta GA - Renovation No. 2

Will have another 2 on the market over the next month. As markets in US are booming by the time you complete the project the property has gone up in value, this is what we are seeing. We are expecting around $80K US profits each for our next two projects?? The projects have been posted on PC.
We will post final figures when completed. Fingers crossed, we may get more??

If interested in looking at our projects, check out posts by @Be Developer.

I am currently in US its kind of fun going to view our properties each day. My husband is project managing, we don't do any hands on work, but we must manage the tradies.



MTR

 

Good points

Pay tax in US and it is credited to our Australian Tax.

I believe tax rates are lower in US than Australia. Currently they are looking at revamping Tax in US, reducing tax for companies. We buy in LLC (Limited Liability Company). Fingers crossed.

I have my tax returns aligned to Australian financial year

In US financial year is December.

 

There is if done in Australia. I seen no indication that the thread was about investing in the USA.

 

I thought you were referring to US.

That's probably why flips don't work too well in Australia unless the market is hot, too many costs in buying and selling.

 

I took 'states' to mean Australian states, but it could be referring to 'united states'.

 

Dunno how much clearer l can say it.
House flippers in America, are they paying any taxes and costs on their profit?
Again , we pay what , 40% or something in tax here if we flip a house in 3mths.

ps , thanks mtr , but your sitch would be different because your an Australian just investing there so of course Scotty will be all over ya.
Pretty amazing that the US market is booming now, wasn't it only a few years ago the whole country was still depressed and still diving, especially property.
And also that anyone can buy property there, wow.
You have to wonder how that goes because here's us with only 25mill or whatever in the size of oz , yet all these restrictions on who can buy.
But yet ,at the same time , they sell off our farm land to Chinese without a second thought.

 

In USA if you sell and buy another property you can avoid/delay paying CGT, that's the simple version. US accountant works this out.

Also CGT in US is around 15%. This also applies if buying in LLC (Limited Liability Company)

 

Not sure what you mean?

I pay US taxes same as if I was a US citizen. It will come down to what I earn in US on my investments, income from rentals, profits from flips/developments. I pay at the taxable rate on profits in US, tax is lower in US than Australia.

The reason US market is booming is because the economy is improving, job increases and the world is buying US property, there are no restrictions on foreigners. I have met people from China, Japan, France, England you name it buying up.
The current property crisis in US is lack of stock which continues to drive property prices up. There is huge demand and not enough stock to meet this

This one was purchased at around $35,000 in 2011... today worth around $160,000 and still going up in value.
Crash was in 2007, recovery of USA property market actually started in 2011

 

Haha yeah tax is probably lower just about everywhere than in Australia isnt it ? same with cost of living , arent we the dearest country in the world , or second or something.
And don't we have the highest debt ratio in the world.?

But wow, you bought that for 35k.
Bloody hell.

She sold her apartment in Jersey for 198k 4mths ago, exactly what she payed for it 15yrs ago.
And she was really, really , lucky to get that, most offers were way below what she payed for it.
Thankfully she did come out with a little bit at least though because she'd payed the loan down.

 

How does your head handle all this property business MTR, l'd be a wreck.

 

We have purchased 18 properties in last 12 months so yes its been a tad hectic. I enjoy it, just wish it was closer to Australia, the flight hours are too long

 

Our latest flip in Atlanta that will be hitting the market this week. We have already had a certified valuation on the property, part of our policy just to make sure we have got it priced correctly as our pricing is always on the conservative side.