Duplex/QS/PPOR, help please oh PC guru's

Sorry for the obsure thread title.

Have a few questions which I figured I would combine into one thread save clutter.

Firstly, I'm looking to build a duplex, 2(3/2/1) on about 600sqm in the Maitland council area.

Each unit will be 150sqm approx.

I'm also looking to move into one of the units and and claim PPOR to exempt myself from CGT when I sell, will the duplex need to be Strata titled before I move in and claim one side as PPOR?

In regards to QS once it's built and I move into one of the units, will the QS halve the build cost? Or value the single unit on what it would cost to build just that unit individually? Say 300k build cost for the duplex, would they just depreciate 150k per unit?@Depreciator ?

Many thanks,
Arc

 

No need to strata before claiming it as main residence.

If you know the cost then the qs report cannot be used. You just need to apportion the costs between the two which you may do on a reasonable basis.

Keep in mind that moving in may not necessarily give you to sell without tax.

 

Arc, if the duplexes are identical, the known total cost of the project would logically be halved. So each dwelling would have $150K attributed to it. Of that, around $130K would be 'building' @ 2.5%. The remaining $20K would be Assets, which depreciate more quickly.
Scott

 

Hi Terry,
What factors would determine my not being able to sell it CGT free?
And also, were I to repeat this process for two other duplexes one after the other, would that show a pattern and be more likely be denied?

 

Are you doing it with the aim of making a profit and taking actions to that end?

 

No he is doing it to make a loss. No one said ever. Seriously though, please explain to us what differing scenarios are possible?

 

Read Tax Determination 1992/135 before going further.

1. Profit making for an isolated transaction OR
2. A business....No CGT. Its not a CGT asset. Taxed in full after GST is allowed for too.

The questions asked indicate a profit making intent, CGT wont apply (even if its your home so its cant be exempt), and a scheme to defraud the Commonwealth to boot if the idea is to move into each and call it your home. Impossible.

The developer toolkit explains many of the tax issues

 

Thanks for the help all!

In a general nature what would be my best course of action to reduce my tax and keep as much profit in my pocket as possible?

Looking to build 3 duplexes in stages.

Block/subdivide/build on one third, then repeat for the next two.

Should I start a business and do the development via that, would be paying 30% tax on all profits though won't I and have to register to GST, BAS statements and the like?

Regards,
Arc

 

Get some specific tax advice

 

How is it different to people flipping property? Or are they paying CGT everytime they sell?

 

They would be paying income tax on the profits.