I am planning on building a duplex in Sydney’s Eastern Suburbs and owing to council subdivision restrictions, will need to have the property under Company Title if I want to be able to sell either side of the duplex individually.
To start out, the duplex will be the principal place of residence for two couples. If one couple wanted to sell their half – is Capital Gains Tax still payable.
I guess in terms of CGT the question is – which wins, being a pricipal place of residence OR it being owned by a company?Looking into it a bit further – it seems that if I want to sell my half of the duplex, I would sell my shares in the company that owns the title to the land. I would still be liable for Capital Gains Tax but could be eligible for a 50% discount if I had the shares for more than 12 months?
HEY dude!, I’m in the process of doing the same thing in the Chifley area, I also have to get a company title.
I wanted to ask you have you done alot of research on builders or are you doing it yourself?I have researched Masterton but I have ben told that they do very cheap jobs.
Please let me know.
Satcha Jazzini
I’m no accountant, but I’ll give my best with this one.
I’m sure that CGT is payable by yourself if you are investing (which seems like it) and yes, if you hold for over 1yr then 50% discount. The owner-occs won’t need to pay CGT if its their PPOR.
Just because the building is a duplex, doesn’t change your own or the other person’s tax position.
Hopefully an accountant will clarify for you.
Hi Satcha
Good to hear I’m not the only masochist trying to take a project like this on!
As far as who we will get to build our duplex – I’m not exactly certain. We have a draftsperson doing up some plans – we will then get them costed and get some building quotes to make sure we can afford to do it that way. If it all seems to be too expensive that way – then we will go with a masterton or similar. I too have heard people question the quality of masterton places – there are a few other out there that do duplexes etc so I would most likely try them as well.
In the end for us – it may come down to a price thing. Even though we are planning on living in the duplexes (rather than just selling for profit) we still need to afford repayments on the initial and construction loans etc.
Have you bought land already – gone through the Randwick council DA process etc? I am interested to see if we can help each other out with any information.
Good luck!
Richas far as the capital gains issue goes – I have done some more research and believe that this is now the case: selling a company title duplex is the same as selling shares in a company (i.e. normally you would be liable for CGT but not pay GST on any profit made) The difference perhaps with company title is that you can get a solicitor to draw up the constitution of the company to state that the only reason the company exists is to give 100% land usage rights to the directors of the company. There then seems to be a case that if the duplex is your PPOR then even though you would sell the shares, you would not be liable to pay CGT as the shares represent your ownership of your PPOR. Hope this makes sense…(hope even more that it makes sense to the tax man!)
I have found a good solicitor in Randwick (Andrew Dawson at Back Schwartz Vaughn) that has dealt with Company Title issues before and, along with a good accountant, should be able to get all of these issues sorted as much as possible.
Originally posted by richardcass:Hope this makes sense…(hope even more that it makes sense to the tax man!)
That’s the bottom line isn’t it? Ever notice that when you ask an accountant a question he never really seems like his 100% sure? I always get the response that tax is a very complicated issue… etc, which I totally empathise
Also, despite what your accountant tells you or what he lodges on your behalf to the ATO, you are still personally responsible! That kills me! lol
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