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ARTICLE · 06 NOVEMBER 2017

Income tax implications for property development projects

Colin Biggers & Paisley
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Proceeds from a property development project may be taxed as a disposal of trading stock, profit making scheme or capital gain.

AustraliaTax
Carlos Gouveia
Carlos Gouveia

IN BRIEF - LANDOWNERS SHOULD SEEK LEGAL ADVICE ON THEIR PERSONAL CIRCUMSTANCES

Proceeds from a property development project may be taxed as a disposal of trading stock, profit making scheme, or capital gain. We take a look at how each of these income tax regimes produces different tax outcomes and the ways in which, using the advice of a tax lawyer, landowners may be able to reduce the amount of income tax payable.

INCOME TAX REGIMES APPLICABLE TO PROCEEDS FROM A PROPERTY DEVELOPMENT PROJECT

There are three possible income tax regimes that can apply to tax the proceeds from a property development project. These are:

  1. a disposal of trading stock,
  2. a profit making scheme, or

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