If you were to buy a property and decide to subdivide and sell of the rear with plans and permits, it is my understanding that no GST is involved unless you have built on it but if you were to build and sell GST will be payable on the sale. Is this correct?
Also, when calculating the CGT payable on disposal of the backyard you need to work out a cost for the land. What method is acceptable for calculating this cost ( e.g. Real Estate Agents' estimates, comparable land sales, etc.) and what proportion of the costs involved in subdividing do you attribute to it? If the cost base calculated was greater than the sale price, maybe due to a softening in the market, do you have a legitimate capital loss that you can use against other gains?
Also, when calculating the CGT payable on disposal of the backyard you need to work out a cost for the land. What method is acceptable for calculating this cost ( e.g. Real Estate Agents' estimates, comparable land sales, etc.) and what proportion of the costs involved in subdividing do you attribute to it? If the cost base calculated was greater than the sale price, maybe due to a softening in the market, do you have a legitimate capital loss that you can use against other gains?
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