pre-1985 Property

If a property with one house on it was bought pre-1985 and a few years after 1985 another dwelling was built on it therefore becoming 2 houses on one title, if the property was sold is the entire property exempt from CGT since it's one title or only 50% of the property? Also would it make any difference if the initial property was purchased as a PPOR?

 

Is more complex than that, you did not add 50% land either & houses depreciate, but it is not 100% CGT exempt IMO, will let others chime in on specifics.

 

There is a seperate CGT asset rule. If the cost of the addition exceeds the statutory cost for the relevant year it may mean you are disposing of two CGT assets and apportioning using a valuer could be a issue. You cant do this yourself.

There is a need to seek advice as the use of the two dwellings must be explored. If both are occupied as the main residence there could be a full exemption. A number of other factors could affect this. Income production will also affect this.

 

And if the owner does the cost base for the beneficiary is the value at death

 

s.108-55(2) ITAA97

A post-85 building or structure on pre-85 land will be treated as a separate CGT asset.

Therefore the 2nd building will be post-CGT. You will need to apportion capital proceeds on sale using a reasonable basis to the pre and post-CGT items.

The 2nd house could have the main residence exemption if used as such throughout ownership.