If you buy a large block of land for $300K and subdivide it in half and sell one portion for $300K you theoretically haven't made a capital gain at this point. Do you pay CGT on part of that sale or can you wait until you sell the remaining portion? I'm sure you can't be that lucky and the ATO would be all over it for a slice of the first sale?
Can anybody help with this?
If you split the block into 2, then each half would have a cost base of $150,000, so there would be a capital gain of $150,000. But if the split is not 50/50 you may be able to vary the figures.
Also, if you bought the land with the intention to sub divide and sell, then CGT may not apply. It may be the profit is just straight income.
have a look at http://www.bantacs.com.au there are heaps of pdf booklets there including one good one called "How not to be a property developer"
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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