Hi,
My husband and I would like to sub-divide and build two townhouses on his mother's block of land. The plan is that his mother would give us half the block of land in return for one of the townhouses and we would live in the other. So basically this would be a contra deal. My husband would build both townhouses (as he is a builder).Are there any tax implications of doing such a contra deal? We also plan on selling our townhouse.
Thanks in advance for any help you can give.
Hi Tahlie,
It's not that difficult, but it does need to be clearly laid out, and all the important details agreed.
What you are really proposing is two transactions:A) You will buy land from "his mother"
You will build a new dwelling for "his mother".Any discount being proffered in either direction can be captured within these two transactions.
There will be a transfer of land when the land is subdivided, which will trigger stamp duty.
If this is mother's PPOR one would expect there is no CGT on the sale.My advice would be to draft a simple HOA (heads of agreement) for each of the transactions, outlining the expectations and responsibilities of each party and take this to a property lawyer to formalise the agreement.
Sounds like a good opportunity, good luck with the proposal.
You will build a new dwelling for "his mother".You must be logged in to reply to this topic. If you don't have an account, you can register here.
