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Many(I'm new)I'm new
2 June 2026

My wife and I bought a piece of land in 2020. Our share is 50:50.

We received approval to subdivide the land and construct a duplex. The construction was completed in mid 2023.

One side is occupied as the principal place of residence. The second one is rented.

We are considering applying for a partition so that she fully owns one side and I own the second side. Both are identical units with the same market value. No exchange of money is involved.

Will this partition attract CGT?

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YellowPotato(Taxicorn)Taxicorn
2 June 2026

Yes


Ownership would have changed:

  1. 2020: One property 50:50
  2. 2020 subdivide: Two property 50:50
  3. 2026?: One property 100:0 and other property 0:100


CGT event has happened because the ownership has changed

  • The side that is rented wouldn't have main residence exemption so a CGT calculation would be needed for the person that disposes their ownership in this property
  • The side that is main residence would depend on who is disposing of their share of the property and if they have main residence exemption available to apply - if whether or not a CGT calculation is required

Taxduck(Taxicorn)Taxicorn
2 June 2026

Partitioning of property is a CGT event.

Check out this private ruling. While not identical to your situation the basic principles are the same

1052191735214 | Legal database

In effect you are disposing of a 50% interest in one of the units to your spouse and your spouse is disposing of a 50% share in the other unit.

A disposal of a share of an asset is a CGT event. One of the units is your main residence, so whoever disposes of their share of the main residence will be exempt. Whoever disposes of their share of the rented side will be subject to CGT.

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Will partition of Duplex co-owned equally by a couple attract CGT? | ATO Community