Does the flip actually make money?

The full money path: Money goes OUT for purchase + stamp duty + costs + reno + holding costs + agent + marketing + conveyancing + tax. Money comes IN from sale only. Net profit is the difference. ROI is the profit divided by total cash you actually deployed (deposit + reno cost + costs covered by you).

The tax trap: The ATO looks at four things to decide if you're a property trader or a capital investor:

• Repetition — multiple flips in succession = trading
• Profit motive — bought specifically to renovate and sell = trading
• Business-like operation — systematic, planned, with records and a budget = trading
• Holding period — even one-offs sold within 12 months can be classified as trading

If you're a trader, the profit is ordinary income taxed at your marginal rate (up to 47% including Medicare). No 50% CGT discount applies. Plus the property is "trading stock" so different accounting rules apply — talk to your accountant before you start, not after.

Trading entity — the structural decision that changes the tax outcome by 20+ percentage points: The default is to flip in your personal name. For most active flippers, that's the worst choice. Here's the comparison:

• Personal name — tax at your marginal rate (up to 47%). 50% CGT discount only applies if held >12 months AND classified as a capital investor (not a trader). Most flippers fail the trader test. No setup cost, no asset protection. Sensible only for a true one-off opportunistic deal.
• Company (Pty Ltd) — flat 25% company tax rate (base rate entity). No 50% CGT discount, but doesn't matter because flips are usually trading income anyway. $2-3k setup, $1-2k/yr compliance. Asset protection: company debts don't flow to personal name. Profits stay at 25% until distributed as franked dividends. Most common structure for serious flippers.
• Discretionary trust + corporate trustee — stream profits to lowest-rate beneficiary (spouse on lower income, adult children with TFNs, or a bucket company at 25%). $3-5k setup, $2-3k/yr compliance. Most flexible, most compliance-heavy. CGT 50% discount can pass through to individual beneficiaries IF the gain is genuinely capital (not trading). Requires careful trust deed drafting.

When does each win?

• One-off, low-income year: Personal name is simplest and might tax at 30% anyway.
• Multiple flips planned or high other income: Company at flat 25% almost always beats personal name. The setup pays for itself on the first deal.
• Family with lower-income spouse / adult kids / a bucket co: Discretionary trust streaming wins on flexibility — different beneficiaries each year depending on circumstances.
• JV / partnership flips: JV vehicle is usually a unit trust + corporate trustee, with your share flowing to your own downstream entity (often a discretionary trust or company).

Critical warning: The entity structure must be in place before settlement. Restructuring later — moving the property from personal name into a company or trust — triggers CGT and (in some states) stamp duty again. This is the most expensive mistake new flippers make. Get accountant + lawyer signed off before you exchange.

GST is the other trap: "New residential premises" (newly built or substantially renovated) attract GST on sale. That's 1/11th of the sale price gone — usually $50-100k on a typical flip. There's a margin scheme that can reduce this, but you have to elect it correctly and meet specific conditions. Get advice.

Costs flippers consistently underestimate:

• Holding costs during reno — interest, rates, insurance, no rent for 2-6 months. Often $10-25k
• Time to sell — campaign, auction/private treaty, cooling off, settlement = 6-12 weeks minimum after listing
• Agent + marketing — typically 2-3% commission + GST + $3-10k marketing
• Your time — 200-500+ hours typical for a meaningful reno. Most flippers calculate ROI ignoring this. Real ROI per hour can work out to $20/hr or less.
• Stamp duty — flippers paying full investor stamp duty often forget it's not deductible at purchase like an investment property (no rental income to deduct against). Trading stock allows deductibility, but only at sale.

The honest math: Most "successful" property flips that show up on social media work out at $20-50/hr after all-in costs and tax. That's not bad for a side hustle but it's not the get-rich-quick story it gets sold as. The ones that genuinely make 30%+ ROI in 6 months usually involve insider knowledge (estate sales, off-market deals via agents you know) or genuine value-add (subdivision, granny flat additions, change of use). Pure cosmetic reno flips rarely clear the tax + costs hurdle in current market conditions.

Money partner / JV flips (the "no money down" pitch): The promise is real but the math is brutal. A typical JV: you bring the deal and project management, your partner brings 100% of the capital. Your partner needs a hurdle return on their money first — typically 8-15% p.a. — and only what's left ("super profit") gets split with you. On a 6-month flip with $300k capital deployed, a 10% hurdle eats $15k off the top before any split. After that split (often 50/50), your share is often a fraction of what a solo flipper would clear. But your capital is $0, so your ROI on cash is technically infinite.

What the spruikers don't mention about JVs:

• Legal structure costs — proper JV deed + entity + accountant: $5-15k. Templated agreements blow up the relationship when something goes wrong.
• You take all the execution risk — if reno blows out, you cop it. If sale price drops, you cop it. The partner is asking for a return, not a partnership of equals in downside.
• Tax flows can surprise you — your "fee" is ordinary income at marginal rate. Their hurdle is interest-like income to them. Profit split tax treatment depends on entity structure. Get advice before you start, not after.
• NSW (and other states) regulate this — sourcing deals for someone else for compensation is buyer's agent activity. Cert of Registration minimum, full BA licence ideally. NSW Fair Trading writes the rules.
• The first deal sets the precedent — if your partner walks away with less than the hurdle (let alone the promised split), there's no second deal. Be conservative on sale prices and timelines, or you'll lose the relationship.

When JV flips actually make sense: You've done several solo flips successfully and have a track record to show. You source genuinely below-market deals. You have BA licensing or a structure that satisfies state regulation. Your partner is sophisticated, sees the structure clearly, and has appropriate risk tolerance. None of these are typically true for first-time flippers.

Better options to compare:

• Value-Add Planner — keep the property, add a granny flat or rooming house, build long-term wealth tax-effectively
• Buy Analysis — buy + hold + grow long-term, compound 6%+ p.a.
• Asset Comparison — property vs ETFs, shares, etc. ETFs often beat flipping on risk-adjusted return.