I am looking at buying a subdividable block (has not been subbed yet). The block has the potential for two street frontage properties. I was thinking of building two houses keeping one and selling the other. As far as I can see there is no way I can do this without being hit by CGT. Does anyone know a way I can structure this to minimise or avoid cap gains?? Originally I was thinking maybe I would build on one side of the block live their for a while and sell it before actually subdividing the land and building on the other block but I think I will still be subject to CGT. Any help with the best way to structure this purchase would be greatly appreciated.
Good news if your intention is to buy build and sell you will not be subject to capital Gains Tax, instead you will be a developer and pay tax on all your profits
I was hoping to live in one as my PPOR but was thinking that when I did come to sell it (quite some way down the track) that I would be subject to CGT on that property as well. I don't mind paying CGT on one (but hoping to minimise) but not to keen to pay on both. I was thinking of subbing and selling half the land to a friend for nil gain (although he would still be up for Stamp Duty) and build and keep the other half for myself whereupon I should have no CGT payable (but not sure if this is right?).
CGT is not your enemy here GST is – if you pay CGT you made a profit ! Hold onto the land for 12 months and get your 50% discount .
I dont know what sort of money you are talking about and what are the costs of subdividing ?In my council – buy a big block for $300 + stamp duty of about $10 – sub div cost $70 legals and such $5 total spent $385
Subdivide and build ( say a build of $150 for low set) you have to sell it for over 344 to make a profit – no profit no cgt. But you will have to pay GSt of $34 – that my friend will sink the deal!
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