This article will guide you through how to process a property purchase for both Residential and Commercial Purchases. This article consists of the following;

• Residential Sale Deposit
• Residential Sale Settlement
• Commercial Sale Deposit
• Commercial Sale Settlement

Residential Sale Deposit

This article will guide you through how to process a property disposal for a property that does not attract GST.

A typical property sale involves two transactions, the first being the deposit and the second being the settlement. You will need to split the property sale into two events, to replicate the actual process.

The Property Sale Deposit event takes up an accrual of the full property sale and the Property Sale Settlement event clears this accrual and allows the user to enter any additional disbursements that relate to the property sale.

Navigate to Fund Level > Transactions > Investment - Sell > Property Sale Deposit

1. Select the Property Account that is being sold
2. Enter the Contract Date and the Deposit amount
3. Enter the Remaining Amount (Contract Amount less the Deposit Amount paid).

   If there was no deposit received the deposit amount should be nil and the remaining amount should be the total contract amount.

4. Enter a Description (Can leave default description if wanted)
   
   
   
   
5. Click Submit to process the deposit.
   

The above screenshot of the event being processed is one where there was no deposit received by the fund, and all proceeds were made on the settlement.

Residential Sale Settlement

This can only be completed once the Residential Sale Deposit is completed if complete you can then process the property settlement.

Navigate to Fund Level > Transactions >Investment - Sell > Property Sale Settlement

1. Select Property Account
2. Enter the Settlement Date, Contract Date
3. Enter the Remaining Amount (Sale Contract amount less the Deposit Amount paid)

   The remaining amount is not inclusive of any disbursements paid or received on settlement.

4. Enter the Based on Sale of Price of amount (The Contract Amount for the sale of the property)
5. Enter a Description (Can use default description)
   

   Class now prefills the Contract Date, Remaining Amount and Sale Price based on the information recorded on the Property Sale Deposit event. 

   
6. Click Add to add "Disbursements"
7. Select Type by using the drop-down field to select the property expense
8. Enter Amount of the disbursement. 
   

   Remember to enter the amount as negative if the amount is being paid by the client, you also have the option to Capitalise or Expense items. In the example above, title fees, legal fees and the agent's selling fees are negative and legal fees and the agent's selling fees have been capitalised.

9. Click Submit button to process the settlement.

The GST fields are not relevant to a Residential Property sale so you can choose to leave these blank.

Commercial Sale Deposit

This article page will take you through processing a property disposal for properties that attract GST "commercial".

A typical property sale involves two transactions, the first being the deposit and the second being the settlement.

You will need to process the property sale into two events, to replicate the actual process. The Property Sale Deposit event takes up an accrual of the full property sale and the Property Sale Settlement event clears this accrual and allows the user to enter any additional disbursements that relate to the property sale.

Navigate to Fund Level > Transactions > Investment - Sell > Property Sale Deposit

1. Select the Property Account under the 'type to search' field. This is the property that is being sold.
2. Contract Date = the date per the contract of sale is the cost base or CGT date.
3. Deposit = the total amount deposited, including the GST component. The gross deposit amount.
4. GST in Deposit = the GST component of the deposit amount received.
5. Total GST = the total GST received to dispose of the property, based on the contract price.
6. Remaining Amount = the total gross amount after deducting the gross deposit amount.
7. Description = free text field, you can change the default description
   
   
8. Click the Submit button to process the deposit.

Remaining Amount and Nil Deposit: The remaining amount is the contract amount less the deposit amount already received. If there was no deposit received the deposit amount should be nil and the remaining amount should be the total gross contract amount.

Commercial Sale Settlement

Once you have processed the property purchase deposit you will then process the property settlement.

Navigate to Fund Level > Transactions > Investment - Sell > Property Sale Settlement 

1. Select the Property Account 
2. Enter Settlement Date, Enter Contract Date.
3. Enter Remaining Amount = "Gross contract price less the gross deposit already received" this is not inclusive of any disbursements paid on settlement.
4. Enter Total GST = "total GST per the contract amount"
5. Enter GST Remaining amount = "the remaining GST to be collected on settlement"
6. Enter the Based on Purchase Price of amount, this is the gross contract price. e.g $880,000.
7. Enter a Description, or leave as the Class default.

   Class now prefills the Contract Date, Remaining Amount, Total GST, GST Remaining and Sale Price based on the information recorded on the Property Sale Deposit event. 

   
   
8. Click Add to add "Disbursements", Select Type from the drop-down field and select expense, Enter Amount of the disbursement "gross amounts", Remember to enter the amount as negative if the amount is being paid by the client.
9. Enter GST if applicable
   

   You also have the option to Capitalise or Expense items. in the example above discharge of mortgage fee and the legal fees have been capitalised, by marking the tick-box under 'Capitalise'.

10. Click Submit to process the settlement.

See attachment "Settlement Adjustment Sheet" to understand the worked example

What's Next?

Does your property have a depreciation schedule?

If the property being sold has a property schedule and you have the Residential Sale or Commercial Sale Deposit and Residential Sale or Commercial Sale Settlement you will need to dispose of the property and assets in the Depreciation Worksheet. Learn how in Sale of Property Worksheet