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Keeping buyers 0.25% deposit

Discussion in 'Accounting & Tax' started by twobobsworth, 30th Sep, 2016.

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  1. twobobsworth

    twobobsworth Well-Known Member

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    I have a property for sale that the buyer is pulling out of within cooling off as they are unable to get finance. This means they will forfeit 0.25%.

    How do I declare this for tax purposes?
     
    giraffez likes this.
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Leave it to the accountant
     
  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

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    You may also have associated costs which offset it eg legals.
     
  4. kkit

    kkit New Member

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    What about the opposite situation? What if i wanted to buy an IP, paid the 0.25% and then pulled out and lost the 0.25%. Can i claim this as a tax deduction?
     
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  5. Rob G

    Rob G Well-Known Member

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    No deduction.

    Could be a capital loss. It really depends upon the precise contract details, e.g. whether a standard contract for land sale exists (it sounds like this from the 'cooling off period' clause).

    See TR 1999/19
     
  6. dabbler

    dabbler Well-Known Member

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    Probably could if recognised as a professional property investor, otherwise what income/investment would be offsetting this so called investment loss ?
     
  7. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

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    No.