Critique my thoughts ...

Discussion in 'Accounting & Tax' started by proper_noobie, 6th Aug, 2015.

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  1. proper_noobie

    proper_noobie Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    115
    Location:
    Melbourne
    I own my PPOR in Melbourne on a 950sq block, perfect for subdivision.

    It's doubled in price since I bought it.

    From what I understand from the SRO website:
    1) In Victoria you don't pay stamp duty to transfer a property to a partner.
    2) You get hit with CGT after 6 years if you convert your PPOR into a rental.

    I recently found out about item 1) but always thought about item 2) so I never considered doing anything with this property. I spoke with a few people recently that made me start thinking ...

    Could I
    - Fix it up (render, roof, kitchen, bathroom, paint, carpet etc)
    - Have it valued
    - Transfer to my partner, fully out of my name
    - Subdivide
    - Rent both properties out
    - When time comes to sell (15+ years), would we only pay CGT on the portion the property has increased in value since I sold it as a whole lot? Since the land is now half the size, how does this work?

    Am I completely lost here or would the system work for me/us?
     
    proper_noobie, 6th Aug, 2015
    #1
  2. 380

    380 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,353
    Location:
    Australia
    Slightly different question..

    What zone is it?

    May be worth while developing 3-4 townhouses!
     
    380, 6th Aug, 2015
    #2
  3. proper_noobie

    proper_noobie Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    115
    Location:
    Melbourne
    I promised to call you recently and forgot as work was busy! Outer east suburbs Melbourne...

    I'll call tomorrow if I get a break during the day.
     
    proper_noobie, 6th Aug, 2015
    #3
  4. 380

    380 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,353
    Location:
    Australia
    No problem, anytime!
     
    380, 6th Aug, 2015
    #4
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,587
    Location:
    Sydney
    Likely that no cgt concessions will apply and the tax on profit will be at your marginal tax rate when transfer occurs
     
    Paul@PAS, 7th Aug, 2015
    #5
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