Calculations in Detail

This is the same example property as above

Land: $213,000

Build: $466,970

Total: $679,970

Today’s Value: $840,000

Gamble on Double Over 10 yrs: $1,680,000

Gross Realisation: $1,000,030

Stamp Duty: $7,448

Legal Fees: $2,300

Total Costs: $9,748

Less On Costs: $990,282

(Loan Costs: $600)

Loan Costs After Tax: $378

(Interest: $12,239)

Interest After Tax: $7,711

Total: $8,089

Less Tax Deductable Costs: $982,193

Off Costs

Agent’s Fees ($2k + 2.75%): $48,200

Legal Fees: $2,300

Total Off Costs: $50,500

After Costs Profit: $931,693

Capital Gain Taxable (50% discount): $465,846

Capital Gain Tax Payable: $202,430

Tax Assumption:

37% on $90,000 = $33,300

45% on $375,846 = $169,130

After Tax Profit After 10 Years: $729,263

After Tax Profit Flipping After 10 Years: $920,600