Advice from accountant:

“If you have got a partition agreement for the title split, there is no CGT implication on the completion of the subdivision to 2 separate properties. The CGT only applies when you happen to sell the new property.”

Phew.

Thanks Terry

I did have a Deed of Partition set up and stamped yes. Although there is a change of title going from 2 names to one name, I believed that the Deed of Partition would cover that although any change in that % ownership as per a new valuation would have a duty payable on that % change. The stamp duty office would make their own assessment of this I presume even if we submitted the Deed of Partition.

I had not considered CGT. The intention upon purchase of the block was that one party would own a property each. The original block has been held for over 12 months but has not been owner occupier so I believe the 50% capital gains tax would apply (30% on one of the entities which is a company). So the increased value of each property will be subject to CGT. We could not subdivide until the new house is built as this is a JV with monies tied together.

We had subdivision approval granted before we started building the new house. As land tax would be triggered by putting in the completion of the subdivision now I was going to wait until the house was further along and put in subdivision after 30 June (WA).

GST I believe might apply if the new house being built was to be sold. That is not the intention.

Is my thinking on track?

J12345