Hello,
I know that CGT is applicable on vacant land when sold but is there any way that I can minimise it?
I have never owned a home before but I have owned the land for 13 years. I wish to sell it and purchase my first home.
Any other ideas to minimise or even eliminate CGT via smart accounting or any legal means?
I don’t feel that its fair to fork out the money because it has been my only property and now I wish to buy a house.
Thank you for any assistance,
Regards.
any expenses such as rates, insurance, interest, mowing etc that have not been claimed as tax deductible can be added to the cost base
Thanks crj,
I thought as much… Damn you ATO!!
I wish they wouldn’t consider it an investment, considering it is the only property I own. Oh well…
can he build a house on it and then sell it tax free?
how big is the land btw? eg I read in one of the forum posts that anything over 100 acres different rules apply.
Thanks for your input, Dean.
The land is only 4.5 acres.
I believe that of I were to put a dwelling on it, that it would be exempted. However, I don’t want to go through the whole building process, in the hope that I can recoupe the building costs, as well as the value of the land.it may well end up a waste of alot of time and money and essentially defeat the purpose.If figure, the buyer may want to build their ideal home on it, with tennis court,pool etc.it could also be used for a commercial purpose.
I don’t want to limit its use, hence reducing the potential value.Thanks again.
JohnBe careful what you believe https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Real-estate/Treating-land-as-your-main-residence/
Hmm,no benefit there for me… However, I wonder if I can defer the CGT event and buy another piece of land (rolling over?) and build my primary residence on it, effectively avoiding the CGT altogether.
No. Roll-over events in Australia would not cover that.
Damn it! Cant catch a break.
Link to roll-overs for people who want to read up, was interesting to see a crown lease and mining rights exchange…..would have been covered.
– https://www.ato.gov.au/General/capital-gains-tax/cgt-exemptions,-rollovers-and-concessions/rollovers/Don’t forget the 50% CGT discount
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
100% discount is better. ;)
Are there any “portable” homes in the area people want to dispose of (ie give away – most give them away but you have to pay for transport), depending on your CGT liability, if someone was to dump an old house on the land, check what services you have to have connected (living without grid connected electricity isnt illegal is it?), move into it and sell the block… you may get lucky and find someone who will take it with the house, otherwise you may have to pay to have it dismantled and disposed of… if you CGT liability is 50k it wouldnt be worth it as that stuff isnt exacly cheap even for one of those houses, if it was 500k this strategy would save you the cost of a house (literally!)… obviously you would have to do enough to “prove” to the ATO that you actually lived in it if they came snooping… just an idea though.
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This reply was modified 8 years, 6 months ago by
aussieguy2000.
Are there any “portable” homes in the area people want to dispose of (ie give away – most give them away but you have to pay for transport), depending on your CGT liability, if someone was to dump an old house on the land, check what services you have to have connected (living without grid connected electricity isnt illegal is it?), move into it and sell the block… you may get lucky and find someone who will take it with the house, otherwise you may have to pay to have it dismantled and disposed of… if you CGT liability is 50k it wouldnt be worth it as that stuff isnt exacly cheap even for one of those houses, if it was 500k this strategy would save you the cost of a house (literally!)… obviously you would have to do enough to “prove” to the ATO that you actually lived in it if they came snooping… just an idea though.
But this would not backdate the exemption to the date of purchase, but from now onwards. Would also need an occupation certificate to be considered a residence – probably.
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
Called the ATO today…
Spoke to a fellow who initially gave me some hope. He thought that I may be exempted because I had not bought a home in the meantime, and particularly because I am considering purchasing another vacant block to replace it.
He put me on hold to check some scripts and to speak to his superior. Apparently he tried to sell his theory to the higher ranked bloke, only to get “put in his place”, were his words.
In short… No Dice!!
Link to roll-overs for people who want to read up, was interesting to see a crown lease and mining rights exchange…..would have been covered.– https://www.ato.gov.au/General/capital-gains-tax/cgt-exemptions,-rollovers-and-concessions/rollovers/
I hope the Obeid family was able to be advised about this.
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This reply was modified 8 years, 6 months ago by
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