You have to distinguish the 2. Income tax uses the term ‘main residence’ whereas the land tax legislation refers to ‘principle place of residence’ (in NSW anyway). Different rules resulting in different outcomes.

The main residence/PPOR is basically the place you reside in as your home.

Those items listed may be used as evidence, but just changing your address doesn’t make a place the main residence if you remain living elsewhere.

How much would it cost to fix? What would this do to your positive (almost) cashflow? Would the buyer reduce the price by the amount it would cost to fix?

If you retain a property you will not have to pay GST as you won’t be selling. but you won’t be able to claim input tax credits either.

If you sell a new residential property you will need to remit 1/11th of the price to the ATO if:
you are registered or required to be resisted for GST,
you are carrying on an enterprise
etc

They would have to work out the cost base – which would be roughly market value now less the value of the land when they bought it and assocaited costs – they could use expenses such as rates, interest etc to reduce the CGT.

The CGT event will be at the date of transfer and any CGT will go on their income for that year. If they did the transfer next week they would have about a year and a half before they need to pay.

Costs
Legal and tax advice – $1000
Conveyancing on transfer $2000
legals on the subdivision – $5000 approx.
Valuation – $800

approx

If they get legal advice the lawyer would likely advise them not to do it.

To work out the cost base we need to know the costs for the 5 elements described under Section 110-25 of the ITAA 1997 which are:

1. Money paid or required to be paid for the asset.

2. Incidental costs of acquiring the asset, or costs in relation to the CGT event, for example, stamp duty, legal fees, tax advice, and so on.

3. Non capital costs you incur in connection with your ownership, for example, interest, rates, land tax, repairs and insurance premiums (provided not previously claimed). Included are any expenses incurred while the property was an owner occupied property.

4. Capital expenditure you incur to increase the value of the asset, if the expenditure is reflected in the state or nature of the asset at the time of the CGT event.

5. Capital expenditure you incur to preserve or defend your title rights to the asset.

So the body corporate is selling off part of the common property? Assuming CGT applies – which it may not – then the usual principles would apply. Work out the cost base and the gain minis the cost base is the taxable income. It would be a company so no 50% discount. Would any profits be passed on to the owners?

Strata titling in itself is not a CGT event, it is when it is sold that tax will be triggered.

Use excel

If you want to spend money try Property Investment Analysis from somersoft.

She needs to get legal advice.

The money doesn’t belong to her it belongs to the company so there are various legal and taxation consequences to using it, even if she doesn’t breach corporations law.

Yes they can. But there are various tax consequences including stamp duty and possibly land tax. They will be subject to Australian tax laws as well as the tax laws of their country of residence.

‘lend’ not ‘borrow’.

Firstmac have been around for years. not a lender that I have ever used in the past 10 years, but they used to be good for servicing. Not sure if this is still the case or not.