- belly113Participant@belly113Join Date: 2016Post Count: 2
Hi everyone. This is my first post so hope someone can answer my question. My wife and I own a 2 acre residential block that is too big for us now. We have a planning permit to subdivide to 5 blocks. Our home of 12 years is sitting in Lot 2. We have a developer wanting to purchase Lot 1,3,4 and 5. He will do the complete development and we will keep our home on Lot 2 and when titles are struck will settle with us for X dollars less the 10% deposit paid.
Firstly can anyone see any problems with this as far as just the logistics of this deal and secondly we have had conflicting reports about whether or CGT is applicable to this scenario.
We see it as realizing an asset but others say CGT is applicable.
I will thank you all in advance for any info that may help us.Tony BurnettParticipant@tonyburnettJoin Date: 2016Post Count: 17
I would sit down and write into the tax office for a ruling if CGT apply, then you have it in writing and can be sure, it will take around 28 days, and the forms are on the ato site somewhere. Make sure you give them the full details.
Its as simple as that, or you can rely on more “opinions”
If you can read and write then rulings are not that hard to do and are free if you do them yourself.
TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
- This reply was modified 4 years, 8 months ago by Tony Burnett.
I can see many legal and tax issues to consider. The developer will be developing land he doesn’t own. Does this mean you will be giving your land as security?
As Tony says you may lose the main residence exemption and the CGT exemption because you are now possibly in the business of developing the property. CGT may not apply in this situation but normal tax rates may.
You need to get some detailed advice.