PPOR - losing deposit (Wollongong)

Hi there

I am in the unfortunate position of potentially backing out of a purchase of a PPOR. At this point I am staring at the possibility of losing the initial deposit.
Whilst I need to accept that, I am wondering if there are any tax implications for me?

If anyone else has been in this situation I would really appreciate your feedback.

Yes it is a difficult situation and I am simply trying to navigate it the best that I can.

Thanks for your help.

 

If you lose money on your main residence, including the deposit, you cannot enjoy any tax relief as a result (sadly).

 

If the cooling off period has past you could stand to lose far more than just the deposit !

 

Is this nsw and are you referring to the 0.25%?

 

id be arguing a different view. you dont have a main residence as you havent moved in.

you have a contract. a right. a right that has been forfeited. potentially a capital loss.

https://www.ato.gov.au/law/view/document?DocID=TXR/TR199919/NAT/ATO/00001&PiT=99991231235958

example 14 and 15 are particularly relevant

 

Thanks all for the replies.

Trainee - yes this is NSW and not it’s the 10% deposit as was purchased at auction.

Mike A - I had a read through and trying to wrap my head around it! From what is written this relates to a CGT event with a loss?
For clarity I have a home which I am about to sell, and hadn’t yet decided whether or not to rentvest or move into the new property.
If the article linked above does apply, does that rule out taking a tax loss against regular income?

Apologies for all of the questions and thanks in advance!

 

Go see a solicitor. You can be sued for more than just the 10% deposit. I had a former client fail to settle and he paid $100K on top of the 10% to avoid being sued. And had hefty legal bills
Google the example of actor Toni Collette and a failed purchase.

If the article linked above does apply, does that rule out taking a tax loss against regular income? Absolutely no way it offsets regular income. Capital losses only offset capital gains. Can be carried fwd indefinately.

 

Thanks Paul