The Australian Taxation Office warned property flippers to pay their taxes to avoid facing criminal charges.
A property flipper in Victoria has been sentenced to two years and 10 months in jail for evading taxes amounting to $1.7m. The offender, Simone Semmens, purchased, developed, and sold 10 luxury properties in Toorak, Portsea, and Caulfield North.
Semmens sold the properties for more than $20m and earning a total of $4.4m. She claimed the properties were for personal use. However, ATO said she should have been registered Goods and Services Tax (GST) and should have lodged Business Activity Statements (BAS).
"If you are buying, selling or developing a property that isn't your primary residence, you have tax obligations. There are many TV shows that make flipping properties look like a fun and lucrative thing to do. People also need to be aware of their tax obligations," said Ian Read, ATO Assistant Commissioner and head of the Criminal Law Program.
Also read: Flipping and Selling: The advice you need before you start
According to ATO, property flippers are required to register for GST if the sales from their property transactions exceed the threshold of $75,000.
"We know most people try to do the right thing, and we will support people who do. But to ensure the community doesn't miss out on essential funding and to protect the integrity of the system, we have to crack down on those who deliberately do the wrong thing," Read said.
Those who buy land or property with the intention of developing it for resale at a profit should also be mindful of their tax obligations.
"People like this are obtaining an unfair advantage over Australians who are doing the right thing and robbing the Australian economy of revenue that could have been spent on essential services. Tax crime is not victimless and we will not tolerate when people try to cheat the tax system," Read said.
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