To put things in simple terms and perspective, got a resi IP bought in 2001 at $410K, subdivided it
couple years ago and still retaining both lots so that was no CGT event.
Now, I plan to sell off one block with the rented property on it but like to do some reno to it before
sale to try getting a good price for it. This leads me to research CGT treatment related to major
capital improvement and also what extent of reno works is considered a legit major capital improvement
in order to work out the correct cost base and resulting CGT.
Anyone has similar prior experience able to share to crystalise it much more clearly than the example
on the above ATO link?
just apportion the original costs between the two lots, and any specific costs for the one property would add to its cost base, as long as not previously claimed.
Does it have to be “major capital improvement” to reset the new cost base after the subdivision?
I still don’t have a clear understanding what major capital improvement means even after speaking to my
accountant and he just refers me to that ATO link.