Recently the ATO has publicly advised of a number of instances whereby property developers were jailed for GST and tax payable on property flipping.
One, in particular, involved a Victoria woman who has been jailed for 2 years and 10 months for GST fraud of $1.7 million.
The women in question Ms Simone Semmens purchase, developed and sold ten luxury properties in Toorak, Portsea and Caulfied North between 2005 and 2011.
Ms Semmens carried out extensive work on the properties, involving developing, subdividing, before selling the properties for a profit of approximately $4.4 million.
Ms Semmens claimed the properties were for personal use, as such tried to argue the properties were covered under the Principal Place of Residence exemption from taxes.

The ATO successfully argued Ms Semmens was, in reality, carrying on a business of property development.
That Ms Semmens should have ensured the appropriate business entity was registered for GST, lodged BAS’s and income tax returns to report GST and taxes on the profits from the property sales.
The ATO argued Ms Semmens had evaded paying $1,738,636 in various taxes.

The ATO has released a statement

” If you are buying, selling or developing a property that isn’t your principal residence, you have tax obligations.

There are many TV shows that make flipping properties look like a fund and lucrative thing to do.

People also need to be aware of their tax obligations”

See also blog:- Flipping Properties – What are the tax issues to consider

If you are considering

– flipping properties as a business or as a way of trading up your principal home, please contact our office for advice.