# Forum More Stuff Debate & Technical Discussion  Renovation career-Owner Builder?Capital Gains Tax etc.

## kingglade

Having almost completed our first renovation (major), my wife and I are convinced we would like to sell up and continue renovating on a more professional level.  Although we're quite handy with the tools and ideas, we would appreciate any thoughts on managing such things as capital gains tax and what it means to be an official Owner Builder. 
In my understanding, works to the value of $12,000+ require that you are registered as an Owner Builder and you can only register once every 2 years.  I suppose that this is intended to keep the cash in the tradies pockets but unfortunately, it doesn't seem to give much scope for the DIYer planning a series of renovations.  Also, correct me if I'm wrong but is there some kind of 6 month guarantee on works carried out by an Owner Builder? 
Another point of curiosity for us is the capital gains question regarding selling your place of residence.  As I understand, if you live in a place for 12 months, you don't pay capital gains tax. 
Just looking for any practical and realistic advice in managing these limitations.  Would love to hear experiences from someone with a similar objective who has managed to make it all work. 
Thanks

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## dib

It's actually even harder than that. According to the victorian building commission you can get 1 permit every 3 years, and owner builders have to warrant their work for 6.5 years ( I think this the same as builders), so if you sell within that time you must provide warranty insurance to purchaser. 
You may be able to get around the 1 permit every 3 years by moving states, But you can't get around providing warranty insurance ( I believe Queensland might be different in only requiring a declaration that the works are not covered by normal builders insurance).  The other thing is to buy properties in alternate names.  Still hard to make living out of 1 reno every 18 months.  Building Commission - Risks

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## Bedford

> Having almost completed our first renovation (major), my wife and I are convinced we would like to sell up and continue renovating on a more professional level.  Although we're quite handy with the tools and ideas, we would appreciate any thoughts on managing such things as capital gains tax and what it means to be an official Owner Builder. 
> In my understanding, works to the value of $12,000+ require that you are registered as an Owner Builder and you can only register once every 2 years.

   You can only get a certificate of consent for an OB permit once in any three year period.   

> Also, correct me if I'm wrong but is there some kind of 6 month guarantee on works carried out by an Owner Builder?

   I think it's 6 1/2 years from the date of completion.   

> Another point of curiosity for us is the capital gains question regarding selling your place of residence.

   There is no capital gains tax on your principal place of residence and you can only have one PPoR.  

> As I understand, if you live in a place for 12 months, you don't pay capital gains tax.

   Excluding your PPoR (which is exempt) you have to pay CGT on other properties when sold. If kept and sold after 12 months there is a 50% discount on the taxable amount i.e. if you gained 100k after 12 months, it is divided by 2, then 50k is added to your normal earnings and taxed at whatever rate that may be.   

> Just looking for any practical and realistic advice in managing these limitations.  Would love to hear experiences from someone with a similar objective who has managed to make it all work.

  Have a look here, it is very restrictive, and one big cork in the ass of progress. Building Commission - Restrictions

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## ringtail

In Qld, 1 permit every 6 years and OB must warrant job for 6 years after completion. $ 11 000 limit before needing a permit. With the 6 year permit rule its not so much keeping money in the tradies pocket but protecting the general public from shonky work done by clueless owner builders ( not saying you are shonky). If you want to be a developer, form a company, buy the houses and get licenced trades to do the job. That way everything is insured - but your profit margin will be very low per property. This is the other reason why OB permits every 6 years - to stop people doing a quick shonk job and turn around, then move onto the next house. If you are a licenced tradesperson with a large scope of work ie a chippy, then you simply ( as an example) buy the house in the wifes name, do all the work that is within your scope ( which is basically everthing bar plumbing and electrical in a timber framed house) and use licenced trades for the rest ( tiling in wet areas, waterproofing etc...) The other trades pay their insurance as needed, you as the chippy insure your work for your client ( wife) and its all good. The only way to do it legally and successfully that I can see is this way. Remember too, that you are basically buying yourself a job, so you have to allow for zero income until that house is back on the market, plus buying all the materials etc... and banks dont like owner builders - been there done that.

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## kingglade

Thanks so much for the very helpful replies.  I guess we really have a lot to consider here, it all sounds like it would be an awkward venture at best.  It just seems almost pointless to do minor renos (keeping the value under 11 or 12K) as in most cases, the profit margin would barely keep you afloat.  I do however, know a chippy who builds houses annually for his wife and lives in them for 12 months before selling.  This system seems to work well for him as a qualified chippy but doesn't really help a DIYer like myself.  More than the warranty insurance for Owner Builders, I am concerned mainly with the permit restrictions, as to be successful in this we would need fast turnovers.   
Sadly, so far the only way that I can see this working is: if you ARE a tradie or you HIRE tradies to do the majority of the work.  Better get myself signed up at TAFE..

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