Hello there
This may be a silly question but i cant find the answer.
If I own a duplex block, subdivide it, retain the front and build at the rear, then sell the rear dwelling… Do i have to pay capital gains tax?
Mat
yes, if you make a profit.
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
Given the figues below no profit is made on the sale of the rear dwelling – Yes or No?
Purchase Price = $500k
Subdivision and Building costs = $250k
TOTAL OUTLAY = $750kSale of rear dwelling = $500k
Left with Debt of = $250k
Or does the house and land have to be revalued after subdivision? And profit / loss worked out on those figures? If so who does the evaluation?
what is the value of the land in portions?
I think you would work out the value of the land for the one you are going to sell and there would be your cost base together with the construction costs.
Have a look at the pdf booklets at http://www.bantacs.com.au as there is a good book there on "how not to be a developer".
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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