Hi guys. Great read on here, learning new stuff all the time. Got a question.
I have bben living at my PPOR for 15 months, and am currently thinking about subdividing the back yard in two, as its 900m2. Even if i sell it as a vacant block and live in the house still, do i have any CGT to worry about? With the funds i want to purchase another property for my future PPOR. Any help would be appreciated.
Anthony
i looked into this about 2 years ago for a similar situation.
firstly i checked the ato website.
just spent the last half hour trying to locate the exact determination, without much luck.
i would not bet my life on it but i will recall my investigations from 2 years ago.
The purchase price of your property is taken into account.
Lets say it cost $500,000 3 years ago. Land was valued at $400,000 and house at $100,000
If you subdivide today! into 2 equal sized lots
and retain the house at the front the cost of the land at the back is $200,000 plus any subdivision costs, lets say $10,000.If you netted $300,000 on the sale of that block your capital gain would be worked on $90,000.
I am interested to know if the proportionate interest component for a mortgage held on the pre-divided block can be included in the cost base.
check out the ato website though!
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