Curious to find out what the CGT implications are, if any, if you seek and gain planning approval to demolish your PPOR and build multiple townhouses in its place but after receiving approval you decide to sell the property with the planning permit without demolishing the existing dwelling.
PPOR capital gains tax applicable when selling with Planning Permit?
- Thread starter DJC
- Start date
A DA etc isn't a CGT event but it does raise some concerns about intention. If your intention and use of the site has been attributable to a intended DA and then you don't proceed there may be a income tax (rather than CGT) issue. ie : Its possible the property did have a CGT event a few months ago when it became trading stock even if the intended development hasn't progressed. Also selling the land which has a former home is very different to selling a actual residential home. It could be subject to GST too. The CGT main residence exemption ends when you cease to occupy the home (subject to an absence rule etc) however a property that is not habitable etc cannot retain the main residence exemption either. Arguably it could have already become trading stock.
This doesn't necessarily mean massive tax. It means calculating it differently to satisfy the ATO if they ask. It may also mean selling the land using the margin scheme to address GST if that's a issue.
You should seek personal tax advice.
Well put Paul!
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