Hi
We are currently trying to sell our home but unfortunately the current market is making it difficult. On the market for $500-$550K. We are currently building and therefore would like to sell soon. We are seeing more and more homes in the area being demolished, land subdivided and 2 new homes on 400sqm being built. We are thinking that this might be a finacially viable option but are unsure on the CGT implications of doing so. We have no issue paying CGT but are wondering how the cost base for such a project would be worked out and whether knocking down a home would provide any tax advantages in the way of asset depreciation/write off? We would probably rent it out for a few years first until we could afford the building costs of 2 new homes that we would have to bear. Any ideas or past experience with something like this?
This might help you get your head around working out the cost base
http://www.ato.gov.au/individuals/content.asp?doc=/content/36907.htm
http://www.ato.gov.au/corporate/content.asp?doc=/content/86198.htm
http://www.ato.gov.au/corporate/content.asp?doc=/content/00150720.htmI can’t answer the other part of the question but if I was you I would ask the tax department if you can do a balancing adjustment on a capital expenditure depreciation (building write off)
Ring them up on 132866 business taxpayers or 132861 individuals they are very helpful at answering questions.Due to the fact that the property was your PPOR it would not qualify for Deductions in respect of Capital works or Asset Depreciation.
James HannahProperty Returns Residential and Commercial Tax Depreciation ConsultantsFully inspected $299* ex GST tax depreciation schedulesVisit propertyreturns for more information
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