what percentage would this be

[steve]

Hello, We have a 980m2 block of land with one house on it. If we were to sub-divide and sell the house on a 450m2 block,this would leave a vacant block of 530m2 . What method would be used to determine the value of each block in relation to the original purchase price for tax purposes ie; capital gain. thankyou once again. steve

 

[Aceyducey]

Steve,

Is this your PPOR or an IP?

Cheers,

Aceyducey

 

[DaleGG]

Hi Steve

There is no hard and fast rule with regard to the valuation and the tax office are obliged to accept any fair attempt at apportioning the values.

Common answers would be:

450/980 x market value
sworn valuation

as Acey suggested though, if the house is currently your PPOR then no CGT would appy as you are merely selling your home and keeping the vacant land.

Dale

Originally posted by steve
Hello, We have a 980m2 block of land with one house on it. If we were to sub-divide and sell the house on a 450m2 block,this would leave a vacant block of 530m2 . What method would be used to determine the value of each block in relation to the original purchase price for tax purposes ie; capital gain. thankyou once again. steve

 

[steve]

Hello again ,
Thankyou both Acey and Dale.

The house is an IP and has been owned over 12 months,so correct me if i'm wrong,The capital gain would be worked out on50% of any profit(less capital expenses) taxed at what ever percentage this and any other income would atract.

The fact that one block has a house and the other doesn't, won't change things?

Dale, by sworn valuation , do you me an affidavit or a writen valuation.

All the very best, Steve.

 

[geoffw]

Steve,

The easy answer is, that if you sold both the blocks, there's no question.

If you sold one, that might provide a fair value for a valuer to consider when valuing the other block.

Otherwise, a paid valuation should provide the ATO with enough proof.

(You may consider having more than one valuation- and be sure you tell the valuer the reason for the val)

 

[DaleGG]

Hi Steve

A sworn valuation is a letter attesting to the value of the property provided by a licensed real estate valuer and signed off as such. It carries more weight than a letter of indicative value.

Dale

Originally posted by steve

Dale, by sworn valuation , do you me an affidavit or a writen valuation.

All the very best, Steve.