Hi
I have an IP with subdivision planning underway.
The purpose of the subdivision is to give away
part of the subdivided family member, ie not sale
for making a profit.Given that most properties went up in prices over
past few years. Can anyone tell me if this
activity could be treated as capital gain event ?Also, for the family member receiving the
subdivided lot, what is the best way to go about
minimising the transfer stamp-duty ?Thanks
MCWyou have to get it valued properly as it is an in family transfer, and it’s better to have it valued high, than low.
it’s better to pay a bit more stamp duty, than to pay a big heap of capital gain when that family member sells it.We are planning to do a similar transaction with family member who is a first home buyer, so will not have to pay stamp duty now or worry about CGT if/when she sells, I believe. Eveything I have read indicates that ATO is looking very carefully at this type of transaction and will deem value to be market value, even if you try to use a lower value. (We have to wait until the deposit she is paying off to us, allows her to get a loan she can afford. Quite a balancing act with property values going up and down)
Would suggest you get 3 agents valuations before you agree on a ‘price’ for your transaction.I guess the debatable issue here is that I am not
“selling” the subdivided lot to the family
member, and therefore no real $$ involved in the
transaction. So, I would have though for stamp
duty calculation sake, the valuation requirement
will still apply … but not the CGT issue,
certainly not to me being the original owner now
parting part of the property for $0 gain.
In real term, not withstanding the CG, I am losing
half the block materially, so my instinct tells me
it should have been treated as a capital loss
event for me ….[biggrin]I am hoping which will
provide tax break for me in the future CG event.Thanks for all your replies so far!
MCW
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