Will there be any tax when subdividing the family home?

[qzha017]

Hi all,

My plan is to build 2 houses on the back of my family home which we lived for more than 10 years. We want to subdivide them and sell the existing one and one of the new houses to pay off mortgage and free up some money. Will I have to pay tax on any or both of the houses that we sell? Whats the best way to go about this to have the minimal tax implications?


Many thanks in advance.

[Rosco]

Hi,

It depends. Tax rules are complicated and depends on the exact circumstances. You really need to get some expert advice from a property accountant

Some basics
1) Generally if you subdivide and sell, the gains are taxable. There are some exemptions for personal home and if owned over 10 years before subdivision commenced.
2) But these are just for the land. If you then create a new activity of building to create a profit, this will still be taxed.

Therefore spend a little bit getting some expert advice, as doing this the smart way will save thousands.

Also need to consider GST too.

Ross

[Frezzinghot]

Hi,

It depends. Tax rules are complicated and depends on the exact circumstances. You really need to get some expert advice from a property accountant

Some basics
1) Generally if you subdivide and sell, the gains are taxable. There are some exemptions for personal home and if owned over 10 years before subdivision commenced.
2) But these are just for the land. If you then create a new activity of building to create a profit, this will still be taxed.

Therefore spend a little bit getting some expert advice, as doing this the smart way will save thousands.

Also need to consider GST too.

Ross

Hi Ross
Ive seen an excel rental return on Facebook that you shared, can you share a copy of this? Happy to pay for this.

Regards