Hi All
If I sell a brand new house that I have not yet lived in will I pay CGT ?
Thanks in advance
It depends upon the circumstances.
It depends on several factors
Did the property increase in value. You pay cgt on the capital gain. Sale price – Cost Base
Cost base = Original Land Value + Cost of BuildingIf you have made a capital gain you will be liable to pay CGT as you Must move into the house as soon as practical
after it is finished
and
You have to continue using it as a main residence for three months
to qualify for a main residence exemption
See http://www.ato.gov.au/content/downloads/NAT4151-04.pdf page 58 of documentYou may also have to collect GST on the Sale of the new property
I am not 100% sure on the GST but I am sure some other people on this forum will comment on this point.
http://www.ato.gov.au/content/downloads/bus00198744nat72957062009.pdfHe doesn't mention whether or not he is a developer hence no cgt only company tax & gst.
Thanks Duckster, thats just what I was wanting to know…..
and….. Scott No Mates…… "He" is a She
I am not a developer just an everyday person who has built a house and cant decide whether to rent it out (if I do it will pay for itself) or sell……. this was only an option if I dont have to pay CGT…..Cheers
Thx, now that we have a bit more info:
(still don't know if it is company owned or other but anyways), Yes you will be subject to CGT, you will also be liable for the GST on the construction which will also hammer your return. Your CGT will be calculated on your marginal rate of tax excluding the profit made on the development. Will you be using the margin scheme or paying gst on the whole of the project?
Rich Lee
From reading the GST stuff
factors like if you paid GST to a developer from a off the plan development come into play .I just fluked being on the same wave length as to what I assumed your circumstances were.
Generally GST is payable on all new residential property. 'New' is classed as built less than 5 yrs ago.
I think CGT would be payable as well assuming there was a gain after expenses – unless it was your main residence – and it cannot be your main residence until you have lived in it. I think there is a tax ruling on this.
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
I am not a developer just an everyday person who has built a house and cant decide whether to rent it out (if I do it will pay for itself) or sell……. this was only an option if I dont have to pay CGT…..
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