Would appreciate if someone can help with this question, I've searched thru these forums and even all the rulings and information on the ATO but can't find an example to explain this but I'm sure many people have done this (or havn't because of the CGT ramficiations).
I'm considering developing my current PPOR by demolishing it and building two adjoining town houses. Ive recieved different advice and opinions from both well meaning friends and relatives and even two accountants who gave me different answers and left me even more confused.
What are the CGT ramifications of this. Would I pay CGT on one or both redeveloped properties?
PPOR purchased in 2002 joint names on contract and title with my partner, purchase price, 500K (est land component 300K). Current house valuation if sold 1 million. Cost of redevelopment. 800K, estimated sale price of each unit 1.2 million.
Is their a way to avoid CGT or minimise it and if not how is the CGT calculated on the above figures.
have a look at http://www.bantacs.com.au they have a lot of booklets there and think this was covered in one of them.
I would think you will pay CGT on one house. This is because only the one you are living in will be your main residence. If you strata them then one is a separate title and you can only claim main residence on one title. If you do not strata them, then it is like making income from your own house – you will only get the exemption on the part you live in. But I am only guessing really.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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