Disclaimer: this is my understanding after speaking with 2 separate accountants, including a structures and tax expert at Crowe Horwarth. Said understanding can and has been proven in the past to be erroneous so please speak with somebody who does this for a living.
The tax code is about your intent. So if you sign a S&P in your own name or other entity and then decide you'd like to renovate and sell the property then you could set up a company for that, assign the contract over, settle as that company, do the work, sell, claim and pay GST and do all that stuff. While you are doing trading activity do not do any B&H properties. Once you're done trading, wind it all down, signal to your accountant that you are no longer buying with the intent to sell and continue on your way.
I'd discuss your plan with your own accountant, but the tainting applies if you have or are associated with a business doing trading/developing then any buy and hold rentals you acquire while that is operating get tainted. Before and after are fine, but you can't be doing both at the same time.
Like... Jan - March, do some holds. April - Sep, set up trading company and have fun. Then wind that down. Next do some holds again... well that's how I've always understood it. Make sure your accountant knows the plan and agrees with it. Can put you in touch with mine if you'd like a second opinion or there are some smart fellows on PT already.
Also if you're going to hold for 10 years+ then it doesn't matter about tainting.
The tax code is about your intent. So if you sign a S&P in your own name or other entity and then decide you'd like to renovate and sell the property then you could set up a company for that, assign the contract over, settle as that company, do the work, sell, claim and pay GST and do all that stuff. While you are doing trading activity do not do any B&H properties. Once you're done trading, wind it all down, signal to your accountant that you are no longer buying with the intent to sell and continue on your way.
I'd discuss your plan with your own accountant, but the tainting applies if you have or are associated with a business doing trading/developing then any buy and hold rentals you acquire while that is operating get tainted. Before and after are fine, but you can't be doing both at the same time.
Like... Jan - March, do some holds. April - Sep, set up trading company and have fun. Then wind that down. Next do some holds again... well that's how I've always understood it. Make sure your accountant knows the plan and agrees with it. Can put you in touch with mine if you'd like a second opinion or there are some smart fellows on PT already.
Also if you're going to hold for 10 years+ then it doesn't matter about tainting.
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