Avoiding Capital Gains Tax

Viewing 5 posts - 1 through 5 (of 5 total)

big_azza
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@big_azza
Join Date: 2004
Post Count: 4
January 9, 2005 - 5:11 pm
Hi, if I owned a property and plan to make several subdivisions, could I develop live in then sell one property each year and claim each property as my primary residence to avoid capital gains tax? If not, what is the best way to avoid capital gains tax?
Regards
Aaron Todhunter
byronent_2
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@byronent_2
Join Date: 2004
Post Count: 337
January 10, 2005 - 2:12 am
Avoid is harsh word.
Your idea would work but that takes an awful long time to save some dollars. Wouldn’t it be wise to sell pay your tax and reinvest and move on.
Paying tax to me is a sure indication that you are making money.
Byronent
Adelaide SA
AUSPROP
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@ausprop
Join Date: 2003
Post Count: 953
January 10, 2005 - 7:49 am
I think the intention would be transparent and you would run into difficulties on this.Thats just my opinion, you may want to speak to an accountant. As Byronent said, you need to consider your opportunity cost as well. CGT is taxed favourably anyway. Best way to avoid CGT would be not to make a capital gain. Taxes and death….

http://www.megainvestments.com.au
Extensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
big_azza
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@big_azza
Join Date: 2004
Post Count: 4
January 10, 2005 - 12:23 pm
The reason i thought of this idea is because I wouldnt have enough money to develop all sites (could be up to 20) at once but i can easily afford to do the first couple then use the money from them to pay for next lot. I got the block cheaply from my grandparents therefore I dont have much in bank repayments.
AUSPROP
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@ausprop
Join Date: 2003
Post Count: 953
January 10, 2005 - 1:12 pm
well the CGT will only apply on the increase in value from when you subdivide the blocks, so you could so something like subdivide off a couple of small blocks and sell them… tax free, then live in your bigger one for a while unitl you get more cash to subdivide the lot?
with a project as big as 20 lots you should definitely get professional advice. if you own this land with little owing on it you should be able to easily get a development loan to do the subdivision in one hit – assuming the deal stacks up which you would want it to anyway.

http://www.megainvestments.com.au
Extensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856