I am looking at knocking down my investment home and building three villas. Check selling prices and rental returns and should make a good profit. Have finance approval and waiting planning approval. Just wonder how capital gains is calculated. I have own investment property for three years.
You probably don't have much choice other than deducting purchase costs + development costs + sales costs + claimed depreciation from the gross realisation.
I will probably have to go talk to accountant. But I wanted to know if I could claim 50% capital gain discount on investment property because held for more than 12 months. Example property cost to purchase 228,000 value now 340,000 Capital gain 112,000 50% 56,0000 Cost of contruction and extras 469,500 selling price $360,000 per villa If you sell a villa how do you work out capital gain
It seems to me that either you always intended to develop or that at some stage you have changed your intention. In this isntance Capital gains tax would not apply and you would be taxed as ordinary income. If your intention has changed you need advice on how to have maximised your capital gain. You may also have some GST issues.
I will go talk to accountant he may advise to buy another property instead of developing can always sell with plans drawn up. I have an excellent tenant, a government agency who are great payers and look after property. Just got money in the bank getting low interest at moment so looking at buying or developing.
I have spoken to accountant and yes I do have to pay GST unless I keep the three villas for five years. I am now looking at owner building. I have hit a problem with financing development because owner building is high risk so will have to put my own money into the build and hopefully get finance on completion and valuation.
Wow crj it is amazing the amount of people like myself included who are GST ignorant. I have recently spoken to a number of small builders, developers and real estate people who know nothing about GST. A lot have not paid GST which is a massive mistake and they could find themselves up for thousands plus interest.
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