Seeking Recommendations

Hi All,

I'm new to this forum as was seeking recommendations regarding an accountant to speak with regarding setting up my tax structure.

I'm seeking to buy an investment property with plans to develop it.

I'm a PAYG full time employee so I would I need to understand which trust to setup family/unit/hybrid so I can claim deductions against my personal income as well having asset protection and all the good thing that come with operating through a trust.

Any help will me much appreciated.

 

Sounds like legal advice is needed if you are considering trusts and ownership issues.

Start with reading as much as possible so you dont end up paying for advice youndont need.

 

Hi Anton, I have to ask - have you owned an investment property and/or developed one before?

I'm just a bit worried that you might be in a "trying to learn to run before you can walk" situation.

 

Depends what you mean by develop. Build to keep v's build to sell would be very very different issues. You may or may not have deductions available if its a construction project. Most costs are not deductible but are deferred to offset the future selling price (with allowance for GST and apportioned for no built).

I would commence with specific tax advice covering income tax, CGT, GST, margin scheme, land tax etc. Then that advice should address future profit / income etc and then with those issues in mind seek further legal advice to assist with family law, asset protection, death etc and to confirm the appropriate structure.

 

Technically speaking you cant really develop an IP. One activity is passive and the other is a enterprise. (A simple analogy but one I think that simplifies the complexity)

 

All,

Thanks for your comment.
No this is my first property and I haven't completed a development before.
I have just finished reading "Australian residential property development for investors" by Ron Forlee so I do have a good idea on what the process involved with developing a property.
At this stage my plan is to either start with a 3 townhouse or subdivide and build project.

 

Ok - your looking at developing and never developed before? Forget abt the accountant for a moment, why not just ring a local builder and ask him how they started out....its more about what sort of property you need to buy to suit your objective of buying a property on good sqm and then knock it down. This involves due diligence that a accountant won't/ can't help you with unless they done it themselves, more commsense bricks and mortar and most builders will be happy to offer you a helping help! just wait for the F bombs to come out when permits are brought up.

Cheers!!!!
Ivan

 

Just be aware that using trusts (and in particular hybrid trusts) can make getting finance difficult, as can having multiple directors in the event you're planning a JV or similar.

Good to know before you start.

 

Hit up @Paul@PFI above - guy is a guru. If you can become one of his clients - you'll be in good hands.

Cheers

Jamie

 

Thanks Jamie,

Paul I sent you an email to see if I can book an appointment.

Thank you all for your comments.

 

I like your enthusiasm - and dont let anyone tell you you cant do it. Just be aware you have a long, hard road ahead of you.
Reading one book isnt close to being enough to know what you dont know. Keep reading.

Life - It's not all Beer & Skittles (Old SS thread)

Developing isnt as easy as buy - develop = 30% profit.
But it can be rewarding all the same.

Blacky

 

Thanks Blacky,

I will never never stop until i reach the top!!

 

I encounter a large number of people who use the term developer. Not all are developers.

I would encourage anyone proposing to build to either sell or keep to seek early advice so they understand the tax issues and the records they need to keep. And then understand the +/- of ownership structure (it will affect finance and may be futile !). The initial guidance covers :

GST, margin scheme, records to keep, apportionment, income tax vs CGT, scrapping, timing of deductions or deferral, trading stock valuation options, when to claim GST (IF permitted). Importantly too is understanding whether you propose to sell some or any etc. I often clear up many misunderstandings in the first meeting to ensure a clear direction.

This information helps when you then discuss finance with your developer savvy mortgage broker. That's right they MUST know developer finance to find the right lender. NOt all brokers know this market well so take care. Their guidance will address who may lend, LVR's, valuation methods etc. These rules are VERY complex and vary between lenders based on the project location and type. . Best to find yourselves in good hands and never assume your bank is the right choice (they probably are NOT). A good broker will know how to present it for either resi or commercial lending.

Lastly structure and legal guidance that conforms with lending options and tax issues.