Browse Forums Building A New House 1 Oct 31, 2013 4:07 pm I've been chatting to a few builders about getting a home built from plans I've had drawn up already and one of the builders raised the possibility of paying cash in hand in order to save 10% (i.e: no GST). Normally I wouldn't entertain the idea, but when the build is likely to be in the $250,000 range, potentially saving $25,000 (almost what I earn a year after taxes!) is making me think twice about it. I have all the money for the build already and I'm not borrowing any money so a bank isn't involved either. My main concern with not having a trail of money paid and a receipt is for the inevitable stuff ups later on down the track - the builder could easily say "who are you, I don't know you" when/if I try get in touch about a problem once the house is handed over. We will have a building contract whcih outlines the builder's responsibilites, and there is an implied warranty under law, but would not having receipts and proof of payment be an issue when trying to get things fixed later? Ethics and the ATO aside, what risks are there by not having receipts and a money trail for work done in building a home? Is it worth saving $25k+ for? Re: Builder offered to be paid cash in hand - risky? 2Oct 31, 2013 4:15 pm I wouldn't do it, and now I think you can't, this forum is public... Ed "ECOECO" At 'EcoEco', we design windows, we design the best windows, we do it for you, so that when you’re happy we are happy. Tel. 1800 326 326 Re: Builder offered to be paid cash in hand - risky? 3Oct 31, 2013 4:18 pm It's the builder's responsibility to pay the GST, isn't it? Not mine? Re: Builder offered to be paid cash in hand - risky? 4Oct 31, 2013 4:20 pm Unless you have a proper contract how do you know he is really cheaper? He might be making shortcuts (After all if he is willing to fiddle the tax why wouldn't he dud you?) I hope you have got the cash then because I can't see a bank lending you money on this type of arrangement. The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Builder offered to be paid cash in hand - risky? 5Oct 31, 2013 4:35 pm decryption It's the builder's responsibility to pay the GST, isn't it? Not mine? http://www.tresscox.com.au/resources/re ... asp?id=809 "ECOECO" At 'EcoEco', we design windows, we design the best windows, we do it for you, so that when you’re happy we are happy. Tel. 1800 326 326 Re: Builder offered to be paid cash in hand - risky? 6Oct 31, 2013 4:40 pm Sounds like he is desperate for your cash. I'm feeling bankruptcy in the wind. Re: Builder offered to be paid cash in hand - risky? 7Oct 31, 2013 4:43 pm ed @ ecoclassic decryption It's the builder's responsibility to pay the GST, isn't it? Not mine? http://www.tresscox.com.au/resources/re ... asp?id=809 Very useful - thanks mate Re: Builder offered to be paid cash in hand - risky? 8Oct 31, 2013 4:48 pm Is this one lump sum cash payment at the end of the completed build? Or still following a payment schedule after each stage ? If it's the latter, you run an incredibly high risk of the builder doing a runner after cash payments on the first or 2nd stage.... leaving you with no indemity insurance and an incomplete home. I can understrand how a $25k saving sounds attractive, but considering all the potential issues you are facing, is it really worth it? Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Builder offered to be paid cash in hand - risky? 9Oct 31, 2013 4:55 pm deluxes Is this one lump sum cash payment at the end of the completed build? Or still following a payment schedule after each stage ? If it's the latter, you run an incredibly high risk of the builder doing a runner after cash payments on the first or 2nd stage.... leaving you with no indemity insurance and an incomplete home. I can understrand how a $25k saving sounds attractive, but considering all the potential issues you are facing, is it really worth it? Excellent point - I didn't think of that. I raised this with another builder (I'm currently talking to 3 builders to get a quote from) and one of them said it's probably not an issue as to the integrity of the builder, as he's often had people knock him back for jobs because he wouldn't do it as a cash job when clients ask for it! The builder just casually offered it, and was happy either way - it's not as if he was forcing me to pay in cash only. I think it was more he assumed I'd be interested in a cash job (ethnic to ethic sort of thing), than a desperate grab for cash. Re: Builder offered to be paid cash in hand - risky? 10Oct 31, 2013 5:11 pm Fair point... it happens all the time, we've had small jobs between mates of mates etc done for cash, no worries. As you said, doesnt mean they dont do quality work, just a bit of a "you help me out, I help you out" thing. Takes a LOT of trust to commit to something the size of a house however! At the end of the day, I guess you just need to weigh up the savings compared to your risk and be comfortable in your decision and know what terms you are operating on... I still personally wouldnt do it, I've seen to many heavily regulated contract situations go pear shaped, let alone a sitaution with out a contract to start with... Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Builder offered to be paid cash in hand - risky? 11Oct 31, 2013 5:14 pm deluxes Fair point... it happens all the time, we've had small jobs between mates of mates etc done for cash, no worries. As you said, doesnt mean they dont do quality work, just a bit of a "you help me out, I help you out" thing. Takes a LOT of trust to commit to something the size of a house however! At the end of the day, I guess you just need to weigh up the savings compared to your risk and be comfortable in your decision and know what terms you are operating on... I still personally wouldnt do it, I've seen to many heavily regulated contract situations go pear shaped, let alone a sitaution with out a contract to start with... Yeah you're right - I've paid tradies cash in hand for some small things (like installing an oven for me a few months ago), but for a whole house, seems a bit risky. Plus his quote may not be the one I end up going with anyways, as there are two other builders I'm talking to. Re: Builder offered to be paid cash in hand - risky? 12Oct 31, 2013 5:35 pm The savings are tempting but not something I would do for the entire build. The only time I would ever even consider it is maybe if I was an OB and just employing him week by week. http://camdenbuild.blogspot.com.au/ by invite only please pm me Hi team, Im looking for a second hand sd4b monitor preferably white. 0 8923 If there have been changes, variations, during construction then the drawings should be revised, the building permit amended and the current, as built drawings given to… 2 4480 |