When flipping a home becomes a business: how to evade the ATO's radar
Many renovators don’t realise their property flip can be taxed as business income, as opposed to a capital gain, if the ATO decides their activity looks more like a profit-making enterprise than a personal home upgrade.
Buying, renovating and selling properties in rapid succession to make a quick profit but could come with major taxation implications. (Image source: J Cardona/Shutterstock.com)
Many Australians buy, renovate and sell homes as a way to create wealth.
For some this begins as a lifestyle choice where you live in a renovators delight, add value through sweat equity and move on after a year or two.
Others take a more deliberate approach and treat renovation and resale as a strategy to generate profit quickly.
The question to address is when this activity moves from a personal investment to a business operation in the eyes…
