We have a double block with a house on one half. It is my partners ppr and he bought it 14 years ago. We are looking at realigning the block so we can sell the house as two 20×20 blocks and sell one with the house intact and the other an empty block. We have been told square blocks with a wide frontage are worth more and scarce. Rather than pulling the house down as it is straddling the two 10×40 blocks.
My question is if we sell separately as I believe we will realise more, will he be up for capital gains tax. We live in lota Brisbane. He bought for $460k and I would hope to get 1,000,000 selling off separately with realignment costs of $70k.
Many thanks for your time to reply to this as we are at loggerheads what to do.
cheers AnitaYes you will be up for CGT or icnome tax and possibly GST.
There are ways to minimise or eliminate these though so make sure you seek tax advice.
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
Hi Terry,
Are you happy to share an example how tax could be eliminated in such a scenario?
I understand that one of the blocks will be considered PPOR (so no tax there) but the other surely will be considered IP so tax will be payable?
Thanks,
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
one way is to sell to a related entity just before sub division
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
one way is to sell to a related entity just before sub division
Alright, but still… once the subdivision takes place, at least one of the lots is subject to CGT, right?
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
Not if you sell it to a trust first. Main residence won’t apply to trust owned property.
Another option is to sell first one after subdivison and then sell it after 3 months, CGT free potentially. The second one can then become main residence.
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
Not if you sell it to a trust first. Main residence won’t apply to trust owned property.
Another option is to sell first one after subdivison and then sell it after 3 months, CGT free potentially. The second one can then become main residence.Interesting ideas, thx! 👍😎
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
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