Cgt?

[blubarb]

Is it true that it is really the land that has the CGT implications and while there is a dwelling on it and it is your PPOR then no CGT? So what happens if you demolish the house you bought for 50k 20 years ago as you PPOR but now want to demolish and sell the land, or subdivide and sell the land?

 

[Rob G.]

You cannot use the main residence exemption for an empty block of land (unless it is only temporary such as in the construction of a new PPOR).

If you subdivide part of a block of your PPOR for the purpose of resale, that part is no longer exempt - but holding title to multiple blocks to use as your PPOR might be OK (< 2ha).

Generally the ATO deems the cost base to be allocated completely to the land where you acquire premises intending to demolish the building - i.e. no capital loss for demolishing.

Demolishing and subdividing might constitute a business of development, in which case ordinary income will apply - not CGT. This depends on how extensive your involvement is.

Do get some advice appropriate to your individual circumstances BEFORE acting.

Cheers,

Rob