Western Sydney home transformed in less than a year - realestate.com.au A great example of an isolated profit making enterprise. Subject to income tax. No CGT. 1. GST on the sale of new residential premises. 2. No main residence exemption as the three month occupancy test is not met. Even if they occupied the property that exemption terminates when the former home is demolished. 3. No main residence since the land was acquired as a profit making enterprise. Its not a CGT asset so cant be exempt. 4. Agent drops the client in by mentioning - They will do it again. That doesnt assist the present sale but just taints future efforts. And agent admits the couple purchased the property for the specified purpose of building a large home rather than the approved duplexes. Why do people speak to media? The ATO reads the same articles.
With price guide of $1.6m to $1.8m and purchase price of $970K. When you factor in buying/selling costs, holding costs, renovation costs, personal efforts costs, capital gains tax how much take home profit do you think they will make in this deal? Cheers, Oracle.
Good point. If they were after a profit - Hmmm. Its not. No way. No income tax to pay when you lose $. $970K $ 41K legals and duty $ 60K Council approvals, plans, demo etc $545K build (ex GST) $ 50K interest $ 2K Rates and water etc Total cost $1.7m plus....... Then add selling costs eg agent (2% $35K and legals $2K) Total cost easily $ Selling price ex GST using margin scheme $1.725
It was a demo and new build. And even if they did it a bit cheaper being in the game its still a income tax and a GST issue is likely confirmed. ( its no CGT issue). And if any related parties did the build then expect a small business audit. Non arms length pricing and GST issues + contractor reporting matters etc Fatal Quote : They do that for a living so they are already building to sell, and then do it all over again.
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