TAx implications for a subdivide and sell

[de nero]

Hey people,

I want to buy a house, subdivide it, keep the house and sell off the new block.

Assuming the house cost $500k, and the block will sell for 200K, how much GST am i up for when i sell the block?

Also is Capital gains tax payable on the sale of the block?

 

[wobbycarly]

Hey people,

I want to buy a house, subdivide it, keep the house and sell off the new block.

Assuming the house cost $500k, and the block will sell for 200K, how much GST am i up for when i sell the block?

It depends. There is a 3 page write-up of exactly this question in the Feb 2011 edition of "Your Investment Property" magazine. (If you ask reallly nicely, I might even be able to photocopy it and PM or email it to you )

Also is Capital gains tax payable on the sale of the block?

It depends. Refer answer 1.

 

[wobbycarly]

For the broader audience...

Hopefully I haven't breached any copyright restrictions, but here's the article...

 

[Ms Jade]

Thanks a lot for that, Rob. very handy!

 

[de nero]

Thanks for the info Rob, much appreciated!!

 

[Mry]

The poor guy had to try and explain the tax implications of subdivisions in plain english over 3 pages. He did a good job too.

Even accountants who spend years doing this type of work find it hard to give simple and clear guidelines on how it works. Its complicated.

 

[iookpa]

http://www.ato.gov.au/content/downloads/bus70665nat15145072010.pdf

Some great info here too.