At Liston Newton Advisory we know that property development is much more than managing a subdivision. You’re running a property development business, and all the financial and tax requirements that come with that.
So we’ll be right there with you to help as your business grows. We provide expert advice and guidance to ensure you set your property development business up correctly from the start, under the right tax structure. We also manage the ATO side of things, to help you minimise your tax wherever possible, and make sure you stay compliant with your tax obligations.
Property development advice
Optimising your tax structure
Capital Gains Tax advice
Ongoing accounting services
We’ve been providing financial advice to property developers for over 40 years, helping you manage your growth and achieve your financial goals.
We can help property developers before the first contract is even signed, ensuring you start with the flexibility that prepares you for any obstacle ahead.
We offer a variety of services for property developers that are tailored to the unique needs of your industry. From tax planning, cashflow analysis, CGT planning, and more, we’ve got you covered.
We’ve seen the industry grow over the years, and we’ve evolved with it. We use the latest software and technology to ensure we make things easier for you and your business.
An investor group of four individuals approached us for advice on setting up a property development business. They wanted an entity that would provide them the best possible asset protection and tax effectiveness.
This was their first time, so we wanted to ensure they understood what they were getting in to. We provided a 20-page letter of advice, answering all their questions and providing useful, practical information around stamp duty, land tax, GST, revenue, and capital accounting. And, importantly, how they could get paid.
We created a structure that managed all the moving parts of their development business. They now have a company to do the development, a holding company to manage the shares within the trading company, and a discretionary trust each to hold their shares.
At Liston Newton Advisory, we understand the nuance and challenges facing property developers today. We understand that no two property developments are the same, and each developer has differing business needs.
We’ve got a long history of working in this industry, and we’re here to help you get a simple and coordinated approach to your financial management and planning. Our team can help with all the financial aspects of your property development, from planning your initial structure, to CGT minimisation when it’s time to sell.
There are two structures you can choose from: a company or a trust. Both have their pros and cons.
A company is the most popular structure. It provides a straightforward business structure that allows external investors to get on board, and also benefits from a tax rate capped at 30%. However, there are limited opportunities for tax concessions, which are particularly important when it comes to capital gains tax.
A trust structure might take the form of a family trust, unit trust, or hybrid trust. Each of these variations allows for greater flexibility in income distribution amongst the beneficiaries, which can enable better tax minimisation. One big drawback of a trust, though, is the increased risk of audit. The ATO has a preference for property developments to be conducted under a company structure, not a trust. So it’s more likely that your business will be audited under a trust structure.
As a business, if your expected turnover is greater than $75,000 within a 12-month period, you’re required to register for GST. As a property developer, this is almost a certainty, so we recommend registering for GST at the outset of your business.
Usually, a transaction involving a residential property is input taxed, and therefore not subject to GST. However, as the type of properties you’re selling are most likely to be new, non-commercial residential premises, your income is subject to GST. On top of this, property developers need to consider other GST issues, which include the margin scheme and GST at settlement.
You can find a more in-depth look into this question in our article here.
Generally, if you plan to do more than one development you’ll be limited in your ability to claim a 50% CGT reduction. If you're considered a professional property developer, the profits from your development are considered income, rather than capital gains.
Essentially, profit from the sale of your property will be considered revenue if:
In this circumstance, the sale of your property development is considered as your business' income rather than selling an asset. So no, you can't claim the 50% CGT reduction on this.
We’ll provide the right financial advice to start your property development business off on the right foot, and ensure you achieve the growth you’re looking for. Get in touch today to talk to our team.