From: Patrick Bruadair
I'm exploring alternative options in the property investment world. I have a query on CGT payable for a develop four/sell two/hold two strategy. For the sake of illustration, assume details as follows:
Buy block of land. Cost = $200,000
Build 4 townhouses. Cost = $360,000
Other related costs = $40,000
Total cost = $600,000 (=$150,000 per unit)
Then sell 2 townhouses at $200,000 each, total = $400,000 (total profit of $100,000
on 2 units, but still -$200,000 for whole development)
Hold and rent out remaining two townhouses for several years (hopefully positive cash flow). Is there a capital gain after the sale of two townhouses or is CGT payable only when a gain is realised on the whole development i.e. after all 4 townhouses sold?.
thanks
Pat
I'm exploring alternative options in the property investment world. I have a query on CGT payable for a develop four/sell two/hold two strategy. For the sake of illustration, assume details as follows:
Buy block of land. Cost = $200,000
Build 4 townhouses. Cost = $360,000
Other related costs = $40,000
Total cost = $600,000 (=$150,000 per unit)
Then sell 2 townhouses at $200,000 each, total = $400,000 (total profit of $100,000
on 2 units, but still -$200,000 for whole development)
Hold and rent out remaining two townhouses for several years (hopefully positive cash flow). Is there a capital gain after the sale of two townhouses or is CGT payable only when a gain is realised on the whole development i.e. after all 4 townhouses sold?.
thanks
Pat
Last edited by a moderator: