Hi, I am in the final stages of finalizing a subdivision in Perth. I have completely renovated the original property (and will live in it) and am selling the rear block. I am trying to fully understand and if possible minimize the capital gains I am required to pay on the sale of the block.
Any info is appreciated!
We're in the process of doing something similar (in Adelaide) and also interested to know if its possible to minimize the capital gains on the sale of the rear block.
This might help
Make sure you are undertaking the subdivision to realise the best capital value for the land rather than as a profit making undertaking. If you subdivide with the intention to make profit you don't make a capital gain, instead you make a revenue gain which you need to pay GST on.
Hold the land for 12 months to claim the 50% CGT discount (individuals and trusts only).
Keep good records of all the costs associated with the subdivision to add to the cost base of the land.
Also, it might be possible to add a portion of your interest paid on your PPOR into the cost base of the new land, thus reducing your capital gain. Talk to your accountant.
Derek and Richard many thanks for the information.
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