CGT on selling backyard

Discussion in 'Accounting & Tax' started by LifesGood, 25th Aug, 2016.

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  1. LifesGood

    LifesGood Well-Known Member

    26th Jun, 2015
    Perth WA
    Hi All, I am hoping you can help clarify the following scenario. I understand that this wont be advice, I will be seeking advice from an accountant in due course.

    Currently I have my PPOR purchased in 2009
    Looking to subdivide and sell rear block

    For example, if I purchased for $500k, it costs me $100k to subdivide and prepare rear lot and then I sell the rear for $400k, how would I work out the approximate CGT payable in this event?

    I lived in this property as my PPOR originally, then rented it for about a year when I went away, and have been back there for a few years.

    Thank you for all your help!
  2. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    Firstly work out if it would be taxed as capital or revenue.

    Assuming it is capital you would need to apportion the value of the land to the 2 blocks and work out the cost base. The taxable income would be the sale price less the cost base.

    No main residence exemption could apply, but you may get the 50% CGT discount.

    Carefully consider the structure of your loans too.
    Perthguy and Daniel Taborsky like this.