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  • Profile photo of ambersambers
    Participant
    @ambers
    Join Date: 2008
    Post Count: 7
    August 22, 2008 - 1:37 pm

    Hi Mick,

    This is a very grey area.   As i understand it with out actually living in on the property for some time you can not claim the house/land that you build as the PPOR and retain the other. So you can not pick which one is your PPOR without living in it. For example i cant say i choose house one as my PPOR and sell it and then live in house 2 even though i have lived on the block before subdivision for 16 years without attracting CGT. this applies to 2 new residences being built. Now if  i did not have to bulldoze the original house then i could claim it as my PPOR sell it and build the new house.

    The rules in this case are not fair but thats life. the numbers still work either way but it would be nice to minimise this type of thing.

    As far as the gst side, my new found accountant is getting me a type of ruling or clarification from the ATO so we shall wait and see what that brings. lol

    Thanks for the input

    Profile photo of ambersambers
    Participant
    @ambers
    Join Date: 2008
    Post Count: 7
    August 12, 2008 - 1:18 pm

    Thank you very much Adrian And Amber for the site. It has been a very steep learning curve since undertaking this project and i have learnt a lot in such a short time. It took a little while to get my head around some of the taxation stuff, but i am there now. i think!

    All the number crunching should be done by the end of the week. Which i am looking forward to. From there all systems are go.

    Profile photo of ambersambers
    Participant
    @ambers
    Join Date: 2008
    Post Count: 7
    July 28, 2008 - 10:36 pm

    Thanks Terryw,

    It appears that we may be able to meet the requirements to reduce the GST side off things on a quick read of the information on the site. As we are not going to make a profit and our intention is not to go into business. That the property is currently our PPR and our only reason to do the subdivision is to be able to accommodate the family in a building that does not require repair.

    So fingers crossed.

    Thanks again all. I will read through it more carefully. I will let you know what happens once i get conformation from a professional.

    Profile photo of ambersambers
    Participant
    @ambers
    Join Date: 2008
    Post Count: 7
    July 28, 2008 - 7:37 am

    Hi Terryw,

    Thanks for the explanation.

    I rang the ATO but really didnt get much out of them other than read pages and chapters out of the book. Which is ok at least i know the pages relevant to me.

    Now im going to have to ring them again for information on the GST side of things. He did seem to think i would not have to pay GST as im not a builder. fingers crossed but i think i will.

    Profile photo of ambersambers
    Participant
    @ambers
    Join Date: 2008
    Post Count: 7
    July 28, 2008 - 5:08 am

    Thanks Melhart,

    Yes i think off the plan is going to be the way to go. Im not after a huge profit just trying to update the old house to accommodate the kids. But the ATO is making that very difficult without inflicting more debt on my part. GST and CGT are killing me.

    The block would not take long to sell as it is a very desirable location.

    But as you say i should be able to remove the GST component by selling off the plan and i hope i can minimise the CGT by 50% and hopefully that will see us break even more or less.

    Is that how you see it?

    Sorry about the CPA thing. Yes a CA would do just as well or anyone that could give me firm figures, so i know what to expect. 

    Best regards

    Profile photo of ambersambers
    Participant
    @ambers
    Join Date: 2008
    Post Count: 7
    July 28, 2008 - 1:16 am

    Hello Melhart,

    Thank you for your comments. They have helped me along a bit.

    Another question would be, the GST component would be on the profit component of the sale. Is this correct?

    I think at this stage it may be better for me to sell of the plan so i don't have the holding costs.

    I would have thought that there would be more written about this type of thing as so many people are doing it.

    Have not been able to get through to the ATO as yet.

    I think i will have to keep looking for a good CPA.

    Thank you again.

    Have a good day.

Viewing 6 posts - 1 through 6 (of 6 total)