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?