Off the plan purchase on sale before completion and tax

Question for the tax experts. If I bought off plan and sold before completion to someone else is there a way I could avoid the stamp duty or capital gains tax? And how would I be taxed. Assume purchase price 1m held for one year and then sold for 1.1m a year later.

 

No and no.

If held 12 months from contract exchange you might get the 50% cgt discount.

 

Interesting question, and an interesting answer, has got me thinking......

As @big max is in qld (l am sure the rules differ between states).

As he only ever paid the deposit and never settled, he never held the title, so transfer never occured, so he never actually had "ownership", so is stamps really due ?

Or could stamps be % based, as he only ever had a 10%/deposit entitlement ????

Otherwise it could be seen as double dipping on stamps duty for a residential property that has yet to even get a certificate of occupancy !!!!!

Thoughts

 

He has entered a contract so duty would be payable.

 

I could be wrong but isn't Victoria the only state where duty isn't payable until settlement. etc in qld i believe duty is payable 30 days from contract date. so would i be right in thinking that in vic this could work?

 

Ok, another thought.
When buying OTP, when is stamp duty actually payable (nsw, qld, vic) ?

EDIT: found this online
"If you are purchasing an "off the plan" residential unit, stamp duty is payable within 15 months of the date of the exchange of Contracts or at completion of the Contract, whichever occurs first."
Applicable to NSW.....
So wouldnt the person holding the entitlement to the unit at this time be the one left "holding the parcel"?

 

In NSW duty is due within 90 days of contract or 12 months if off the plan.

 

No. Each person entering a contract would be liable.

 

i'm talking about VIC & QLD :s

 

Terry - Could one not structure the purchase agreement such that title does not pass until completion (or make it "a option to purchase" such that it can be "on sold" without attracting stamp duty and or cgt?

 

There would be several ways to structure it.
Simulataneous settlement - you settle and a microsecond later your purchaser settles
assign the contract
nominate a different purchaser.
Options

However all would result in the same stamp duty consequences (generally) and CGT/Income tax. If the property is in QLD an option may save you duty. But if you have already entered into a contract to purchase it is probably too late.

 

What about if you had a contract that said you agreed to purchase it, "only in the event you could not arrange a sale to a 3rd party"?

 

Stamp duty would apply

 

You should read the news more !! Victorian law changes will affect that view.

2017 off-the-plan duty concession changes FAQs | State Revenue Office[/QUOTE]

 

A claytons contract ? Is it a contract

 

Yes. But only once when the sale is competed? Or twice?

 

It would be a contract. Both sides provide consideration. However the completion of the property transfer would only happen once...hence only stamp duty paid once on the transfer and no cgt. That's the thinking anyhow - whether something like this could be structured.

 

I would ask a lawyer. An agreement isnt always a contract.

 

Not a stamp duty expert by any means, but I had a long coffee break !

Your line of argument seems to follow Part 4A of the Duties Act 2000 (VIC), i.e. sub-sales of land

However, you need to determine if an OTP assignment is really a sub-sale where only additional consideration is valued.

Why don't you take your contract details to a legal practitioner who specialises in revenue law for your state.

 

each time.