PPoR CGT exemption & Joint Tenants

[bryn]

Ok, I'm looking at buying a property with another person (who is not my spouse).

The plan is to buy it, I'll move in & then we'll look at subdividing & taking half each. He will keep renting where he is.

What I'd like to do is claim it as my PPoR when I move in (I am occupying 100% of it & paying the mortgage), then when/if we subdivide it keep one as my PPoR & one as his PPoR.

Doable?

 

[Terry_w]

You would generally be considered to own separate interests and these would be treated separately for tax reasons JTs are treated as tenants in common in equal shares for CGT.

If he is not living there then it will not be his main residence.


Because ownership will be changing there would also be a CGT event. Also because you are sub-dividing you should seek advice as to whether CGT would apply or would it be straight income tax. Probably won't make much difference early on.

Stamp duty would apply as well as you would be transferring titles to different names. This may be avoided depending on a few things.

GST is an issue too as new land....

 

[Terry_w]

Also you should consider whether this should be purchased as Joint Tenants at all. If you die it would pass to him automatically.

This could result in all sorts of problems and could be challenged, especially in NSW, and cost a fortune in legal costs.

(assuming you are spouses).