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Land banking taxation.

Discussion in 'Accounting & Tax' started by Sonamic, 5th Jul, 2015.

  1. Sonamic

    Sonamic Well-Known Member

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    Location:
    Sunny QLD
    Hi all. I'm looking at buying an OTP block of land. 10% down and not gaining Titles until June 2016. Land in this estate is in high demand and this is one of the last releases.

    Now my question is if I go ahead with the Purchase and put down the 10% and then in 12 months time resell at a profit what Gains am I liable for? Secondly if it is sold prior to Settlement? Sorry if this is a basic question that everyone should know, but a quick site search turned up nothing.
     
    Last edited: 5th Jul, 2015
  2. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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    Impossible to answer without more facts. Sounds like a profit from an isolated transaction so capital gains tax wouldnt be applicable.
     
    Last edited: 5th Jul, 2015
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    taxable income = income - deductions.
     
  4. Sonamic

    Sonamic Well-Known Member

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    Thanks Mike. 350k Resi Land in QLD. 35k now with balance at Settlement. May sell in 12 months for 450k. IF I don't decide to build on it. In which case the thread is moot.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Taxable income =(450k-350) - (stamp duty, agents fees, other costs).
    Tax = taxable income x tax rate.

    If CGT applies you may get a 50% discount if held longer than 12 months
     
  6. Sonamic

    Sonamic Well-Known Member

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    Thanks Terry. I'll sleep on it.
     
  7. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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    Location:
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    Hope you have a sleeping bag. Sleeping on a vacant block in QLD could be cold this time of year. And you dont get the main residence exemption either
     
  8. Sonamic

    Sonamic Well-Known Member

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    Location:
    Sunny QLD
    Touché Mike. :D Yes true. But it's also situated where the Mrs would like to live. With ocean views from the front and hinterland from the rear. So could become the next PPOR. . . .