Why people sell before sub division

Viewing 12 posts - 1 through 12 (of 12 total)

garg
Member
@garg
Join Date: 2009
Post Count: 32
October 27, 2009 - 2:16 am
Hi,
I have seen people selling home with big lands.
Sometime is clear that sub division will result in higher values?
Why people sell undivided?
Lockymac
Member
@lockymac
Join Date: 2009
Post Count: 78
October 27, 2009 - 2:45 am
Some people dont know.
Others dont want the hassel, it is a little but time consuming, also funding issues
But I reckon most of it is because they dont know how and cant be bothered. Just go and buy it of them:)
garg
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@garg
Join Date: 2009
Post Count: 32
October 27, 2009 - 3:12 am
do they want to avoid any CGT issues?
kazwood
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@kazwood
Join Date: 2006
Post Count: 20
October 27, 2009 - 3:22 am
It is easier to sell the land than develop. If you held the land more than 12 months you can get capital gains concessions. If you build you have to pay GST when you sell and can not claim a capital gain concession. If you hold for 5 years and than sell no GST is payable. It is a lot of money to develop and hold.
garg
Member
@garg
Join Date: 2009
Post Count: 32
October 27, 2009 - 3:27 am
GST on what?
garg
Member
@garg
Join Date: 2009
Post Count: 32
October 27, 2009 - 3:50 am
After sub divide, i build new house in rear?
If i sell old house:- Do i pay GST?
If i sell new house – Do i pay GST?
Thanks
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
October 27, 2009 - 10:53 am
new houses attract GST as does the sale of new land.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
garg
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@garg
Join Date: 2009
Post Count: 32
October 27, 2009 - 9:39 pm
If i buy house & move into it.
Then i sub divide and sell old house.
Am i liable for CGT?
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
October 27, 2009 - 10:01 pm
you could be
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
garg
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@garg
Join Date: 2009
Post Count: 32
October 27, 2009 - 10:34 pm
It will be PPOR sale. it is old house. Why CGT?
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
October 27, 2009 - 10:42 pm
if it is your main residence and you have no other, and the land is under 2 hectares, then it may be CGT exempt.
You should run this by your accountant
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Scott No Mates
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@scott-no-mates
Join Date: 2005
Post Count: 3,856
October 28, 2009 - 2:47 am
If you have subdivided your block, you have created a new block and cgt can be assessed on the new block (you will need to engage a valuer to determine how much each block is worth, PPOR & new block). You will also have to pay gst (or have it included in the price of the new block).