All Topics / Help Needed! / CGT on proceeds of subdivision on IP

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  • Profile photo of Solomon10Solomon10
    Participant
    @solomon10
    Join Date: 2010
    Post Count: 135
    May 31, 2011 - 1:31 am

    I have looked at the ATO website and can't find the answer to my question,can anyone help?

    In simple terms if i buy an existing house for 380,000, with a loan of 350,000, then subdivide and sell off the backyard for say 190,000, has this triggered a CGT event? Or can i just dump the full 190,000 onto the loan for the existing house to bring it down? Thanks in advance.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539
    May 31, 2011 - 2:11 am

    yes.

    note that if you have owned the property for more than 12mths, then only half of the profits will be subject to cgt

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of luke86luke86
    Participant
    @luke86
    Join Date: 2010
    Post Count: 470
    May 31, 2011 - 2:25 am

    And I believe you will also have to pay GST due to the creation of a new title.

    Luke

    Profile photo of Solomon10Solomon10
    Participant
    @solomon10
    Join Date: 2010
    Post Count: 135
    May 31, 2011 - 2:49 pm

    Thanks people !

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