Hi guys, have a question about CGT on a subdivided block.
This will be my PPOR
My plan is to buy house on large block & subdivide back half of the block.
Now will I have to pay CGT on the back half of the block when I sell it??The other thing I was thinking, is to subdivide the block, sell the front block with house on, which is my PPOR. Then when the front block is sold, build a 2nd house on the back block, this new house will become my PPOR.
thanx guys.
I always prefer Option 2
For one thing. If you build the 2nd house on the back block. and you decide you want to rent it. You can usually get better rent then first home. You can get great depreciation because its a new dwelling which is great for cashflow.
Obviously you would need to seek out some professional opinion on this but from what I can remember:
Option 1 if you sell the subdivided land – Yes, you are liable for CGT as it is no longer classified as a PPOR.
Option 2 if you built at the back and moved from the front house to that – The front house wouldn't be liable for CGT as it was your PPOR for the entire time before you sold it.
Cheers
Tom
I wouldnt be building the back house until i had sold the front one. So lets just say ive just sold the front house, i no longer own a house.now i start building the 2nd house out the back, wouldnt this become my new PPOR.
The front one would still be CGT exempt. The 2nd house would become your PPOR however if you sold it down the track you would only be partially exempt as there was a period before building when it wasn't your PPOR and subject to CGT.
You would need to confirm this with a decent accountant.
Cheers
Tom
Cheers Tom,Ok i get it now.
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