All Topics / Legal & Accounting / Capital Gains PPOR

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  • Profile photo of costadamcostadam
    Participant
    @costadam
    Join Date: 2011
    Post Count: 5
    October 24, 2011 - 8:58 am

    This is a bit more complex than your standard Capital Gains Question. I understand quite clearly the tax implications on a PPOR though I am looking at developing and building 2 units on the back of a new property.

    The facts; Purchase of a new home w/ 950sqm, rent out the front unit, build 2 new units at the back and move into one of the new units myself, and the 2nd unit let my son move into. Once they are complete we will live in for 6 months or so then sell them. The dilemma is that can the 2 new homes be built , 1 under my name and 1 under my sons name so the profits we make from selling will be tax free under PPOR? How can we go about this. Would both our names have to be on a loan? Or when we subdivide do we put our names on each title?

    Thanks

    Profile photo of costadamcostadam
    Participant
    @costadam
    Join Date: 2011
    Post Count: 5
    October 24, 2011 - 9:10 am

    What if both our names were on the loan for the house and land? Whats the best way to go about this?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 25, 2011 - 7:35 am

    All on one title now?

    Once you split them you will have 3 titles – you could only live in one. There may be a way to purchase it now with your son on title and then divide the title and move 2 to your name and 1 to his. Possibly no stamp duty if done correctly. Then possible 2 out of 3 CGT free,

    You need good advice/

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of costadamcostadam
    Participant
    @costadam
    Join Date: 2011
    Post Count: 5
    October 25, 2011 - 8:09 am

    Ok. Can we have 3 names on the title. This way when we subdivide we have one title each and have 3 of us live in the three different homes this way creating PPOR for each of us and therefore when we sell after development no capital gains tax?

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 25, 2011 - 8:39 am

    possibly.

    what state?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of costadamcostadam
    Participant
    @costadam
    Join Date: 2011
    Post Count: 5
    October 25, 2011 - 11:22 am

    Victoria

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    October 25, 2011 - 12:08 pm

    Can’t help with vic, but tell your advisor to look at partitioning the property under the duties act. ie when you buy it you buy in the same % share as the end ownership. Not sure if it can be done down there.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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