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CGT query

Discussion in 'Accounting & Tax' started by Martinez22, 2nd Aug, 2016.

  1. Martinez22

    Martinez22 Well-Known Member

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    Perth
    We would like to do a build and retain (currently living in front house) then move into back unit once complete and turn front house into investment and hold both for 12 months. If we were to then sell both, do we pay CGT on the old house or new house?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes you will pay CGT - GST too maybe
     
  3. Martinez22

    Martinez22 Well-Known Member

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    Yes but on which property??
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Only new property is subject to GST.

    The issue of CGT needs to be explored as there is a main residence catch if you build and the 12 month CGT discount isnt always a given. Especially if you complete the new build them move to the other property.

    Read TD 92/135....Ignore the example of the "builder" as its a red herring. The concept of building a property for the purpose of producing a profit is the key element. If you do that CGT may not even apply and all the profit may be taxed and there is no main residence exemption.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You could possibly choose.
     
  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Possibly ...Not assurred