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  • Profile photo of WesWes
    Participant
    @craig25
    Join Date: 2014
    Post Count: 7

    Thanks Benny and Terry for your help. I didn’t think it was quite correct what the accountant was telling him.

    where you split the land of the PPOR and end up with 2 houses the main residence exemption can only apply to one of those houses at any point in time.

    So in this example he would have claimed the main residence exemption on the original house, which is now sold. I am thinking that no capital gains tax should be payable on the sale of this house as it was his main residence when he subdivided and when he sold. Would this be correct or am I missing something?

    And now with the second house, the one that has been constructed, I am a bit confused. If it is sold now is capital gains tax applicable considering that he has lived in it for over 1 year?

    The portion of the land and construction cost for the new house cannot be eligible for the main residence exemption (until after living in it)

    As he has lived in it for over one year does this mean he can avoid capital gains tax on this house if he sells now? Or if he would need to pay it how would it be calculated.

    Thanks Terry for referring to section 118-110 of the ITAA 1997. I have tried to find answers from googling this but I’m still confused.

    Cheers

    Profile photo of WesWes
    Participant
    @craig25
    Join Date: 2014
    Post Count: 7

    I am no expert but from memory you need an offer and acceptance to form a contract. Seems a bit harsh to me with out knowing all the details.

    Profile photo of WesWes
    Participant
    @craig25
    Join Date: 2014
    Post Count: 7

    Hey DT,

    It,s an IP and loan is interest only.

    Cheers

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