Stamp duty concession in QLD. Be Careful with capital gains.

If you are a first home buyer in Qld be careful with the stamp duty concession and capital gains

A young guy i know bought his first unit and hoped the advice given by the Stamp Duty Office would put him on the right path. He wanted to claim the stamp duty concession.
The Stamp Duty Website said that he could keep existing tenants either fixed or periodic if they were in place for up to 6 months before moving in and still claim the concession. No mention of the fact that capital gains would apply to any gains during this period. No advice was given to check with ATO on this matter.

This person wrongly presumed that capital gains tax would not apply.during this period as he thought there was an exemption.during this period.to help out existing tenants. This seems logical. WRONG
He now has to play tax on the capital gains during this period.
The Stamp Duty office should realise they are dealing with young people with no experience in buying property and be more helpful by telling them to check with the ATO regarding capital gains tax, ..

 

Why would they? Does capital gains tax have anything to do with the Office of Revenue?
How much capital gains in a unit did he get in 6 months?
It seems logical to me...

 

I'm sorry your friend got caught out, but it's not the SRO's duty to advise on tax matters, they're completely separate.

How much capital gain did he get in 6 months?

 

Ha - snap!

 

Argh. Every post of mine tonight has a spelling or grammatical error. Fatigue huh.

 

I didn't pick up an error, I was just chuckling b/c I posted the same thing as you

 

I fail to see the connection between the two.
Regardless if the buyer claimed the SD concesion or not - if the place was rented (even for a day) they would be required to pay CGT on the gain (on a pro-ratered basis).

One event has no impact on the other.

Blacky

 

Ha ha ha. I'm tired of you copying me all the time Jess.

 

Are these people mind readers?

To add to the bad news, they may even be liable to the SRO for land tax too.

 

I don't agree.
With the stamp duty office advising young first home buyers that they can keep tenants in place for up to six months to get the stamp duty concession it could be construed that they are not liable for stamp duty on capital gains. They should advise young buyers to check with the ATO. Some people might say they are steering young people down a less profitable path
How much capital gains will he pay?
Substantial because he bought well and intends selling it in twelve months.

 

I disagree. People should do their own research and not rely on a state government giving them legal advice on commonwealth taxes - advice which they didn't ask for.

 

he askedabout first home owner stampduty? Did he ask HIS accountant or HIS solicitor if he had asked the govt dept about stamp duty they would have said ask your solicitor or accountant.

Good work giving the department a failing mark for not answering a question they were not asked

 

Next you will be blaming mortgage brokers as they said he could get a loan, but they didn't tell him there would be CGT.

There is no connection between CGT and stamp duty.

 

He read their site which steered him into a less profitable situation.Why do they mention it at all if it misleads young buyers.
I will have to agree to disagree.

 

Why is this specifically a 'young persons problem'? I have known FHB who were in their mid-30's and older.

The exemption for stamp duty has nothing to do with CGT. The buyer is obviously sufficiently educated to know that they qualify for the 50% reduction in CGT if they hold for 12 months.

 

Did they mention anything about income tax from the rental income?

 

Just another 'young person' looking to blame someone else for their mis-calculation (also known as lack of effort to research).
They were capable to visit the site of the SRO to make sure they can claim the discount. But cant be bothered to check the ATO site to see how much tax they will need to pay on the profit (noting its only a small % of the profit).

And what on earth makes you think the SRO person would have any idea about what tax you may/may not be liable for?

Meh - no sympathy. Take some responsibility for your own actions. Life shouldnt be handed to you on a plate.

Blacky

 

These are completely separate issues overseen by different entities.

Stamp duty is levied by the states.

CGT is a federal issue.
Marg

 

Hehe...
...mediocre minds...

 

Only on the weekends. During the week we both nail it.