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Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 44670
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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We purchased a property two years ago and recently obtained

Customer Question

We purchased a property two years ago and recently obtained DA approval for subdivision and dual occupancy on the property. We are developing the property and plan on selling the new development and living in the home on the same property. We would like to know when captial would apply. We undertand that you can receive a 50 discount on CG after a 12 month period. Would the 12 months start from the subdivision certificate or after the property has been built.
Submitted: 8 months ago.
Category: Australia Law
Expert:  Leon replied 8 months ago.

My name is ***** ***** I am a NSW Solicitor. I will do my best to assist you with your question.

Expert:  Leon replied 8 months ago.

Good Evening.

If you are subdividing the subdivision does not give rise to a capital gain and you are ok.

The CGT is paid on the sale of the subdivided block.

Here is the link from the ATO

https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Real-estate/Subdividing-and-amalgamating-land/

However, you may make a capital gain or capital loss when you sell the subdivided blocks. The date you acquired the subdivided blocks is the date you acquired the original parcel of land and the cost base of the original land is divided between the subdivided blocks on a reasonable basis.

The 50% discount applies as you have one it for more the 12 months as the purchase date is the initial purchase not the subdivision date.

I hope this makes sense and is of assistance. If there is nothing further Happy New Year.

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Regards

Leon