Property Developer Tax Specialists
Tax and accounting for property transactions is a very complex area of tax law and often requires careful analysis and assessment from a specialist property tax accountant.
Property transactions can be classified into three key tax categories;
1. Mere realisation of capital asset – an asset is typically held long-term. You occupy the property or usually have a longer-term passive income.
Tax treatment: this will be on the capital account, subject to capital gains tax. If applicable, you can apply for the primary residence CGT exemption and claim the 50% CGT Discount if held for more than 12 months. GST will typically not apply.
2. Isolated transaction with a view to profit – a property transaction is entered into for a short-term gain with no real intention to live in the property and/or rent out long-term for passive income.
Tax treatment: this will be on the revenue account, subject to normal income tax; you cannot claim the CGT main residence exemption or 50% CGT Discount. The transaction can sometimes be subject to GST.
3. You are carrying on a property development business – You have a history of developing and selling property and typically going about things in a sophisticated, carefully thought-through manner.
Tax treatment: this will be on the revenue account, subject to normal income tax; you cannot claim the CGT main residence exemption or 50% CGT Discount. The transaction will often be subject to GST.
It is essential to understand that the assessment of the property transaction is based on the underlying facts and not a label you put on the transaction. Furthermore, if the intention of the property transaction changes, so can the tax treatment.
At Zweck, we specialise in property tax accounting. Our approach entails in-depth consultations with you to analyse your specific transaction, assess its feasibility, and offer expert guidance to ensure your complete understanding of your tax responsibilities.
If you need a specialist tax accountant to assist you with your property tax, contact us today.
