Capital Gains Exemption question

Hi

I'm possibly grasping at straws here. But does intention come into consideration when paying CGT?

I have purchased land that we were going to build our dream home on. Then went through a crappy separation & will have to sell the land before the 12months is up.

Does the fact that it was purchased to be for our PPOR have any bearing?

Is it pro-rata or indexed if its been 7 months?

Appreciate any comments. Thanks in advance.

 

You cannot intend to have a main residence. You can only reside in a completed structure too. Therefore the sale would generate a CGT gain or loss. Costs such as legals and duties, selling costs etc and all ownership costs incl bank interest etc may reduce the "profit".

For land tax the land intended use as a home can be relevant if that is a issue.

Sale of land can be subject to GST but as your intentions were own this privately and there is no "enterprise" involved when you sell it would be input taxed. Meaning no GST.

 

Taxation Determination TD 51 states that a mere intention to construct a dwelling or to occupy a dwelling as a sole or principle residence, but without actually doing so, is insufficient to obtain the exemption.

You are not entitled to the main residence exemption as a dwelling was never constructed on your vacant block of land.