HI Guys,
There seems to be quite a bit of info about selling developments and tax implications. Just wondering if anyone knows if CGT will be applicable if one has the intention of developing and holding the asset.
ie we have a block that is going to be developed into a few town houses. All for the purpose of renting out once built. We are of the understanding that if the assets are held for more than 5 years no GST will be incurred….. but what happens when we sell after 5 years do we need to pay CGT and how is it calculated?
Any thoughts on this would be greatly appreciated.
Thanks xx
If your intention is to hold then generally CGT would apply. If you want to just build and sell then generally income tax.
CGT would be sale price less cost base. If over 12 months then 50% discount may be available.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
Thanks Terry,
That's a great help!!
So just for clarity for myself 'cost base' would include land, all associated construction costs & interest on money for both?
Thanks again
Possibly wouldn't include interest unless you didn't claim it along the way. Also incl buying and selling costs, commissions for agents, advertising for sale, legals etc
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
Ahh of course
Thanks for clearing that up for me Terry – appreciate it!
Is it 5 years from land purchase or 5 years from development completion?
There is no development until it is constructed, so from completion/first occupation.
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