This article is from the Australian Property Journal archive
FORMER TV presenter and property developer Simone Semmens has been sentenced to jail for GST fraud, in a case that serves as a reminder that flipping properties for profit can count as “running a business”, said Australian Taxation Office.
Semmens was convicted of 10 offences of dishonestly causing a loss to the Commonwealth contrary to section 135.1 (5) of the Criminal Code (Commonwealth).
The socialite was sentenced to two years and 10 months in jail. Between 2005 and 2011, Semmens purchased, developed and sold 10 luxury properties in Toorak, Portsea and Caulfield North.
According to the ATO, Semmens carried out extensive work on the properties, developing and subdividing them before selling them for a profit. She sold these properties for more than $20 million and made a total profit of more than $4.4 million.
She claimed the properties were for personal use, but the ATO argued she was carrying on a business and should have been registered for GST, lodging Business Activity Statements (BAS) and reporting the property sales.
ATO assistant commissioner Ian Read said by choosing not to, she evaded paying $1,738,636 in tax.
“The ATO is using this as an opportunity to remind people that flipping properties for profit can count as running a business, requiring you to register for GST and lodge BAS.
“If you are buying, selling or developing a property that isn’t your primary residence, you have tax obligations,” Read added.
“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,” the assistant commissioner said. “You are required to register for GST if the turnover from your property transactions is more than the GST registration threshold of $75,000 and if you buy land or property with the intention of developing it for resale at a profit.”
“In the case of Ms Semmens, this is someone who was knowingly carrying on an enterprise. She set up Semco Developments Pty Ltd as a property development company to purchase, renovate and sell houses. She was aware of her tax obligations and chose to dishonestly evade paying over $1.7 million in GST,”
Read said the sentence sends a clear message to those who try and cheat the tax system.
“This wasn’t a one-off property sale; this is a case of someone deliberately carrying on an enterprise without meeting 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.”
