All Topics / Legal & Accounting / Subdivision sell or build

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  • Profile photo of keikokeiko
    Join Date: 2008
    Post Count: 513

    I have several questions regarding a subdivision which I am half way through completion and I am now unsure at what stage I should sell and what taxes etc that I will have to pay,

    Purchased in personal name.

    Owes me $450,000.

    Option 1,

    Current valuation the way it stands $600,000

    I have development approval to subdivide into 3 lots and keep the existing house on 1 lot

    I could sell now and pay capital gains on the $150,000/$75,000.

    Option 2,

    Complete development and install water power etc and get individual titles cost $50,000, sell $700,000.

    Option 3,

    Complete development and build 2 new houses cost $500,000 sell all 3 for $1,350,000

    I am interested to know what taxes I will have to pay etc for each option?

    and will I still get 50% CGT free on each option?

    Do I pay GST on any of the options or on some parts etc?

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    prob straigt income tax. gst on the sale of new land for first 5 years. may be able to apply margin scheme.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

    Profile photo of keikokeiko
    Join Date: 2008
    Post Count: 513

    thankyou terry. I tried searching the margin scheme but couldn't quite find what I was looking for.

    Just another thought, if I moved into the property for 6 months and then sold it in its current state as a whole piece of land , how would the capital gains tax be worked out,

    A, say its worth $600,000 today and I sell in 6 months for $650,000 would I pay tax upto $600,000 and then the remaining $50,000 would be tax free as it would be my ppor or is it worked out differently? 

Viewing 3 posts - 1 through 3 (of 3 total)

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