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Declaring Interest Income on offplan property contract

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Newbie

Views 1427

Replies 3

Client of mine has made 10% deposits to purchase an offplan property. According to the contract of sale, the 10% deposit will be deposit into a interest generating bank account. My client has contact his solicitor and the vendor's solicitor. None of them can provide the interest earned during the 2018 financial year. My client is not willing to lodge a tax return without fully declare his interest income. Is there any tax regulation enforce the vendor's solicitor to report the interest income?

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Most helpful response

Community Support

Replies 0

Hi @TamPartners,

 

Thanks for getting in touch!

 

Generally, if a property is purchased off the plan there would have to be a contract which should deal with interest payable on the deposit, i.e. who pays and who receives the interest and how the interest payments are recorded. 

 

It's recommended to check the sales contract first and if you can't get the information from the vendor’s solicitor directly, you may need to approach the vendor directly.

 

If you have further questions, you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

 

 

 

 

3 REPLIES 3
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Taxicorn

Replies 2

So did the interest belong to your client?

If not then why do they need to know this information?

 

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Newbie

Replies 1

For offplan property, the developer will put the 10% deposit in a bank account before the settlement. Interest earned from which will be shared with the purchaser.

My client should report in the 2018 tax return his 50% share of the interest earned from the 10% deposit.

Highlighted

Most helpful response

Community Support

Replies 0

Hi @TamPartners,

 

Thanks for getting in touch!

 

Generally, if a property is purchased off the plan there would have to be a contract which should deal with interest payable on the deposit, i.e. who pays and who receives the interest and how the interest payments are recorded. 

 

It's recommended to check the sales contract first and if you can't get the information from the vendor’s solicitor directly, you may need to approach the vendor directly.

 

If you have further questions, you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.