CGT on Townhouse Development

[littlemochi]

Hi all,

I bought an investment property in Melbourne SE three years ago. The property is held under my name (not in a trust, etc) and it has been rented ever since I bought it.

Recently there is an opportunity to knockdown existing house and build 3 townhouses on the block. We're in the process of getting DA for this. The plan is to either hold them all or sell one of the townhouses to reduce the mortgage.

My question is how does the CGT and/or GST work in this scenario? Since I've been holding the original house for few years, does that mean I'll automatically get the 50% CGT reduction on all 3 townhouses? Or do I need to hold 1+ years for all the townhouses again?

Does the GST apply considering this is my first development and held under personal name?

Thank you.

 

[Scott No Mates]

I am not an accountant .......

However, the land has been owned for more than 1 year then you get the cgt discount, how this applies over several townhoused - seek your own personalised advice from an accountant.

GST - this will apply in a couple of ways:
a) If you are registered - you will wear the cost of gst as part of the construction but will also bear the cost upon sale (recovery)
b) Application of the margin scheme

 

[littlemochi]

Thanks Scott. Anyone has recommendation of good property accountants in Melbourne?