Turning PPOR into Duplex. Help with structure.

Bear with me as this could be long, my mother recently passed away tragically in our family home. My father is 66 and now retired & would like to move on. He has moved in with me and the house is currently being used by my brother.

He would like to build a duplex using all the equity he has built up over the years.

He owns the house outright and it is valued at 750k roughly. He could either build on this land...

OR

The other option is to finish the reno my parents were doing and then sell it, using money and buying something cheaper and then making the duplex then.

End Goal: Keeping one and selling the other, the one he keeps would be kept as his PPOR.

Hoping to know what is the best strategy, considering, tax, GST and CGT.

Thanks in advance.

 

impossible to say based on those limited facts.
Does your father own the house, and could he fund any construction costs?

 

I would be seeking advice on the tax issues as well as the Centrelink implications which will require licensed financial advice. There is also the issue of downsizer benefits to factor in.

Dont assume doing a dev makes more money. It may actually result in a loss.

Option 3 should be explored too. It may be sensible to also consider a DA and selling the property as-is at an enhanced value.

 

I have s similar situation. I have owned my home for 20 years and now want to do a duplex. Sell one off the plan and keep the other as primary residence post development. May I know what the tax implications would be in this instance.

 

There is no specific "rule"but the attached developer toolkit covers the tax issues in a general sense. Specific advice should be obtained.

You can expect that the main residence exemption on the existing home will end on the date is ceases to be a home. The half you sell is likely to be subject to income tax on the isolated profit making rather than CGT and GST would be a issue for the 50% sold. The other half MAY be a main residence where you keep it long term. If sold soon after it also would be subject to GST and also likely not have a main residence CGT exemption and also be subject to taxation of the profits.

 

Try
Tax Tip 27: Borrowing to knock down PPOR and build duplex and Rent one Tax Tip 27: Borrowing to knock down PPOR and build duplex and Rent one

think I have another relevant post on this in my tax tips too, but can't find it now