Hi, fellow investors,
Last year I bought a block of land and started building my house. In March this year, I sold my principal place and intend to move in the new one when it finishes.
However, because it is a bit too far to the city. I am thinking of selling it when it finishes. Do I have to pay CGT on sale?
yes unless you can show that you have lived in it and it is your principal place or residence
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phone 0412 437 582Hi,
Agree with Dr X. You can only nominate one PROR at a time.
Looks like you will to pay tax but remember you may be entitle to the CGT discount if you have owned it for twelve months and the dates start on the date you exchange contracts and not settlement date.
Cheers
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Project management also available – finding solutions for problem properties! We can manage your renovation project for you.ilearner,
I’m not 100% clear on this so you may need further advice, but I believe there is a rule along the lines that if you buy a block of land with the intent to build and move in as your PPOR, you have 4 years to do so. I’m just not sure how it works if you have currently elected a different property as your PPOR (as opposed to renting while waiting to move in).
If this does work for you other rules associated with it are:
-You must move into the new property as soon as it is finished
-You must retain it as your PPOR for at least 3 months after completionYou will need to move before you sell it, but you may be able to avoid CGT. Worth checking up on.
Rhys
Thanks for your kind response. I am still not sure what I should do… more experience / response is appreciated.
Thanks,
iLearner
check with an accountant I would suggest. These things come down to intention but from an outsiders point of view it could appear that you have built a spec home. As such you could be liable for GST on the sale of the completed home and the net proceeds after that will be assessed at your full marginal rate – CGT would not apply in this scenario. And proving intention can be an interesting process!
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Hi Ausprop,
In your experience have you seen something like this treated as a business activity for a single project?
Cheers
[email protected] – Experienced investors living in NZ who can find properties to meet your needs! Email us to receive details of upcoming deals.
Project management also available – finding solutions for problem properties! We can manage your renovation project for you.well I hear of people saying things like “it’s a one off, I will fly under the radar”, yet the ATO has made quite a big deal this year out of targeting one off property transactions and their ability to match state reveneue and council records etc against your return. the guidance I have read is that a one-off transcation can certainly be an enteprise. Julia’s booklet is always an excellent resource for this type of situation:
http://www.bantacs.com.au/booklets/How_Not_To_Be_A_Developer_Booklet.pdf
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Thanks for the link!
Cheers
[email protected] – Experienced investors living in NZ who can find properties to meet your needs! Email us to receive details of upcoming deals.
Project management also available – finding solutions for problem properties! We can manage your renovation project for you.Thanks AUSPORT and DON and LIZ for your kind advice. I believe there are many cases like this. They are plenty of people doing the subdivision, development so on.
Maybe I move in the house and wait for 3 months to sell for the sake of safety.
iLearner
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