Tax avoidance on property sales – don’t risk it

Property developers who try and avoid declaring tax on the sale of property are more likely than ever to be contacted by the ATO.

Specific funding received in the 2010 -2011 Budget will be used to look closely at GST compliance as part of a dedicated program over the next four years.

As part of this program, the ATO is increasing its use of data matching to ensure property developers are reporting all tax obligations on property sales, to promote a level playing field and to make it fairer for all Australians.

Deputy Commissioner Shane Reardon said the ATO is matching information provided on Business Activity Statements (BAS) and income tax returns with information from the Office of State Revenue and Land Titles Office to ensure property developers are correctly reporting GST and income tax (including capital gains tax) on property sales.

“We have found some property developers deliberately avoiding their obligations by collecting the GST from the purchaser and then failing to pass this on to the ATO either by not lodging their BAS, de-registering from the GST system or not reporting sales within their BAS.

“We are also looking at property developers who intentionally remain outside the GST system or claim credits during construction, but then fail to lodge their business activity statement and individual income tax return.

“These developers are cheating the community and breaking the law.

In a recent case, a taxpayer was identified as a developer of subdivisions and purchased rural
farmland, subdividing it into residential lots for the purpose of sale. Through data matching activities the ATO identified over 100 sales made by the same taxpayer. The main issues in this case were:

•Omitted GST of approximately $1 million
•Non lodgement/default assessments of $5 million (GST)
•Overstated Input Tax Credits of $200k

The taxpayer had not reported the property sales and was charged the highest penalty applicable – amounting to approximately $4.5 million.

“Where we find people who deliberately avoid their tax obligations we will deal with them firmly with appropriate penalties, interest or even prosecution,” Mr Reardon said.

Every property transaction you make may have a tax consequence you need to report. If you think you have undeclared tax relating to a property sale, contact your tax agent or the ATO to make a voluntary disclosure.

More information on GST and property is available from  www.ato.gov.au/gstpropertyguide

THE Harcourts property franchise will team up with rural services business Landmark in a bid to challenge the dominance of the Elders real estate brand.

The deal, announced yesterday, will cover both companies’ regional and rural real estate operations by April in the joint venture, Landmark Harcourts.

The new business will include some of Harcourts’ 280 Australian offices and Landmark’s 125 rural real estate branches and is expected to turn over some $20 billion in property sales a year.
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The existing Landmark real estate business will be rebranded as a part of an equal-party joint venture that will be ”integrated into the greater Harcourts family,” Harcourts Australasian head Bryan Thomson said.

Since its formation in New Zealand in 1888, Harcourts has established a network of 640 real estate franchises in Australia, Indonesia, South Africa and China.

Landmark’s rural services business operates from 400 locations in Australia.

The new business will incorporate the companies’ rural and regional operations and leave Harcourts’ metropolitan business unchanged.

SIMON JOHANSON

http://www.smh.com.au/business/property/harcourts-and-landmark-team-up-to-take-on-elders-20110215-1av8w.html

A real estate listing website accused of copyright breaches received over $1 million in funding from the Federal Government’s news innovation body Commercialisation Australia less than one month ago, it has emerged.

The revelation comes as real estate bodies have attacked AllHomes.com.au for allegedly lifting listings from property sites including RealEstateView.com.au, which is owned by the Real Estate Institute of Victoria.

Last week, AllHomes told The Age it had copied listings from other real estate portals and added them to its own site as part of a free trial offering.

Those comments sparked a legal debate. While AllHomes said content was clearly within the public domain, legal experts have challenged that assertion.

Commercialisation Australia announced on April 16 that AllHomes was one of the first 21 companies to receive money from the new body.

The grant announcement describes AllHomes as “an innovative and information rich portal focused at the wider real estate community” and says the “portal has changed the dynamics of the real estate industry in the ACT”.

“AllHomes has developed a novel data processing system that brings together rich data sets and allows advanced data cross matching to occur, independent of size and complexities.”

However, there are certain requirements attached to this level of funding. The Government states that eligible companies must “be able to demonstrate that they have ownership or beneficial use of the intellectual property necessary to carry out the commercialisation project”.

AllHomes must repay the grant as a percentage of sales income from outcomes of the project, or as a percentage of company profits, depending on its success.

The grant is also designed to help funding activities associated with work necessary for “installing and establishing process, systems and services that enable a new product… to be effectively brought to market”.

Types of eligible expenditure listed by the Government include spending for protecting intellectual copyright, along with contract, plant and prototype expenditure.

Commercialisation Australia chief executive Doron Ben-Meir says he is not able to comment on the specific case of AllHomes, but says CA would step in when a particular site which has received funding breaks terms and conditions.

“Our function is not to get involved. When we invest, we aren’t legally responsible for the company, we are only responsible for any arrangements that we have. They are in control of their own destiny.”

“If they get into trouble and breach the contract with us, then it’s our business. There are various arrangements we have, and when one of those is broken, that’s when we would look at taking action. There is no general answer, we look at each specific instance.”

AllHomes director Timothy White was contacted for comment this morning, but no reply was received before publication.

Intellectual property lawyer Trevor Choy says while lifting listings from other sites could constitute copyright theft, it could be a difficult case to bring before a court.

“For somebody to take action, you need to have some type of damage occur – you need to have suffered a loss. It’s very difficult to argue that from this case, because how do you show that AllHomes has actually caused a real estate site to lose money?”

Meanwhile, the REIV says it will continue to watch the situation as it develops, but admits it is still unsure what to do. Spokesperson Robert Larocca says the organisation is still formulating a stance.

“We are unsure what to do about it, really. I’m aware they have received funding, and the conditions of which Commercialisation Australia can clarify. As we said before, we stand in the company of Rupert Murdoch in terms of protecting content used for other purposes, and we hope it doesn’t occur in the future.”

Meanwhile, the Real Estate Institute of Tasmania told the Launceston Examiner over the weekend there is a legal battle brewing between the entities, and that AllHomes has even threatened to sue the organisation. The REIT was contacted, but no reply was received before publication.

Patrick Stafford

Smart Company

http://www.smartcompany.com.au/legal/20100518-property-site-accused-of-copyright-breaches-got-1-million-from-commercialisation-australia.html

Please Take A Minute To Ask Yourself 3 Important Questions

1. Do you upload property listings to major websites but cringe at excessive monthly fees?
2. Are you satisfied with the level of inquiries received compared to the fees you pay?
3. Do you upload to free property websites that never deliver quality buyer leads?

“In a recent survey, Real Estate Guide found that 93% of agents feel they pay too much for internet leads (or) they upload  to free websites that never deliver an acceptable amount of inquiries”

Facts About Free Property Websites
Free real estate websites generate primary revenue from third party advertisers via banner advertising,  normally finance companies. “Free real estate websites only want the agents properties to attract third party advertiser revenue, this is why they offer a free upload service for agents.

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Childers, situated on the Bruce Highway on the east coast of Queensland, is a National Trust town dating back to pioneering days and boasting wonderful historical buildings. Brisbane is only three hundred kilometres to the south and Bundaberg with a population of over forty thousand people is within fifty kilometres. Hervey Bay, home to the humpback whales which migrate every year, is only seventy kilometres away.

Beautiful Woodgate Beach, with it’s eighteen kilometres of flat beach ensures you are only a short drive away from fishing and sailing. Childers, with its lush green landscape, is an ideal choice for semi-retirement and the diverse local agricultural industry has plenty of work on offer .

As a local family man, I established Andy’s Realty with the goal of breaking outside of the traditional real estate industry. My aim is to provide new levels of customer service and here at Andy’s Realty, my primary focus is on you and your real estate needs.

At Andy’s Realty,we specialises in residential, land and life style properties. Whether you are buying or selling real estate you will always be of our top priority. Andy’s Realty is intent on exceeding client’s service expectations and that is why so many people choose our business when they wish to buy or sell their home.

North West Property Agents is a locally owned and operated Real Estate Agency that flourishes on providing professional, friendly and dependable services to our ever growing list of clientele.

The Principal and staff at North West Property Agents invite you to explore our site and contact us for further information about our Real Estate services across the North West Coast and its surrounding regions.

We look forward to being of assistance to you, your family and friends for all your real estate requirements, “Sales, Rentals or Property Management”.

Introducing Straddie Sales and Rentals who provides comprehensive real estate services on North Stradbroke Island including residential sales & investment portfolio management.  Your dream of owning a slice of this island paradise can become a reality.

Straddies also offers the largest selection of affordable holiday accommodation where dolphins holiday at Amity Point, North Stradbroke Island. Surrounded by the calm waters of Moreton Bay, the Pacific Ocean and dune forests Amity Point is a tranquil uncrowded seaside village with a rich and colourful history, a relic of simpler times appealing to families and anyone looking to escape, relax, wet a line & rejuvenate.

At Law Property Australia, we only market new properties. This specialisation allows us to provide you with the best possible service in your search for a brand new home or apartment. Our goal is to only source properties in areas with sound growth potential and that offer a range of lifestyle amenities – thus enhancing your investment as an owner-occupier or as an investor.

We offer pre-planned and constructed “Turn-key homes” – virtually ready to move in to, pre-planned home and land packages on selected blocks of land ready to build, and apartments and townhouses; at this stage, all located in the greater Brisbane area, the Gold Coast and the Sunshine Coast.

We aim to provide a high level of one on one service from experienced and qualified property professionals. You will gain the benefit of our knowledge of the property market as well as being able to make use of our knowledge and research on each area in which we are active.

Premium Property Finders

A buyers agent is helpful when you work long and often anti-social hours, with family commitments pulling you one way and the added stress of searching for a home, it can be too much, especially when you’re trying to fit this into late evenings, short weekends and the odd day off. Finding a home or investment property using a buyer agent is not just time consuming, but stressful and frustrating at the best of times.

Premium Property Finders are your buyers agent.

With a buyers agent you wouldn’t need to go through this scenerio: have you ever spent every minute of the day looking for a property, trying to re-arrange your life going to open houses, which are all staggered at different times of the day and week? You eventually find something but it’s going to auction and the Agent exaggerates and tells you the property will go for a lot less than it actually will. You spend thousands of dollars on pest and building reports, re-arrange your entire auction day, turn up at the auction all excited, then the first bidder throws in a bid way above your budget. Happens all the time!

How many times do you want to go through that disappointing nightmare?

By using us as your buyers agent this will not happen.

How Can I Get the Most Out of My Limited Advertising Budget?

Making every advertising dollar count takes some planning. Each ad must contain the right message, be targeted to the right customer, and be placed in the right vehicle at the time the customer is ready to buy.

The Right Message

Delivering the right message increases the chances your potential customer will make the purchase of your product/service. Issues to consider in crafting the right message include the benefit your product/service provides the customer and the advantages over the competition. Make it easy for the potential customer to say Yes! What is it that makes your product/service special? Once you have identified the benefit, be sure to develop the message in the most appealing way.

If the benefit of using your service is saving money, for example, the message might be “Reduce your automobile insurance by up to 50%”! This is a very different message than “Save money on your automobile insurance”. You’ve added a comparison that gets attention. Providing measurable results within a given time frame lends a sense of urgency. “Lose 20 lbs. in 30 days” is much more powerful than “guaranteed to help you lose weight.

Consider the benefits of your product/service, the advantage(s) over the competition, and provide a sense of urgency for the most effective response to your advertising.

The Right Customer

Targeting the right customer greatly increases the results of your advertising efforts. If your perfect customer is a homeowner, it makes little sense to include renters in your targeted audience. Identifying your perfect customer requires a little research. Most businesses operate under the 80—20 customer rule, meaning 80% of revenues are generated by 20% of their customers. Do you know who your perfect customers are? A review of your sales records will be instructive.

Many beauty salons, for example, perceive their perfect customers are the women who stop in 3 or 4 times a year for color and other expensive treatments. A look at the records may indicate that the customer spending more dollars annually is the woman who comes in for a shampoo and set every week. She spends less money each visit, but the volume adds up over the course of the year. Know who your perfect customers are and allot 75-80% of your advertising budget to attracting more of them.

The Right Vehicle

Advertising rates are based on the number of readers or viewers they reach, no matter the profile of those readers or viewers. Choose advertising vehicles that not only fit within your budget parameters, but are targeted specifically to your perfect customers.

• Print Advertising

Large metropolitan newspapers have huge readership, but may not be targeted to your perfect customers. You pay to reach thousands, or perhaps millions, of individuals who are not all good prospects for your product/service. Community newspapers with limited geographic reach, specialty publications with targeted readership, and special interest magazines are generally better buys. Many national magazines have regional advertising opportunities that are more cost effective and reach a more targeted geographic area.

Direct mail campaigns can be very cost effective, sent to the right list of potential perfect customers. Your own database of existing customers is a good start, and lists are available for purchase, as well.

• Broadcast Advertising

Radio advertising can be cost effective for annual or semi-annual promotions or during certain seasons. In some areas, local and regional television ads are available on network stations. Cable television ads are affordable in most areas, and many stations will assist in the production of your ads.

• The Right Timing

The final factor to consider for your advertising plan is not only when, but how many times does it take to make the sale? Obviously, if you’re selling seasonal products or services, your ads need to be placed accordingly. But whether your product/service is seasonal or something to be purchased any time during the year, consistency is key. Placing one ad in one publication or sending out one direct mail piece and expecting to generate sales is foolhardy.

Even the right message to the right customers in the right vehicle needs to hit your customer when he/she is ready and able to make the purchase. A series of ads or postcards with a consistent message is necessary to generate results from your advertising.

SOURCE -http://www.lupra.com/