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pngo(Dynamo)Dynamo
25 Mar 2024

Dear Sir/Madam,

For example:

I buy a house to living in year 2018 and living there to 2021

In 2021, I do subdivide and build separate 2 units and just completed separate 2 titles A & B in 2/2024 .

I keep unit A for living and want to selling unit B to pay bank loan

  • If I sell unit B now, do I have to pay capital gain tax ? If Yes, can I get exempt CGT due to build units for 3 years and can ATO still treatment it as residential property now?
  • Can I have to pay GST for selling unit B? I am not developer.
  • If Yes, Do I need apply Margin Scheme GST for this case? How to apply for Margin Scheme?
  • Do I need apply "Your foreign resident capital gains withholding clearance certificate" for this case?

I read some ATO websites but not really understand. Please help me clarified.

Many thanks

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210 views
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wonka5(Devotee)Devotee
25 Mar 2024

Once you've subdivided you've made to assets and you can't claim a main residence exemption on both. So yes you will be liable for CGT but may be exempt for some portions that you treated the property as your main residence.


Here is information from their website to help you calculate your CGT obligations and to figure out if you need to pay GST or not: Subdividing and combining land | Australian Taxation Office (ato.gov.au)

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Most helpful reply

wonka5(Devotee)Devotee
25 Mar 2024

Once you've subdivided you've made to assets and you can't claim a main residence exemption on both. So yes you will be liable for CGT but may be exempt for some portions that you treated the property as your main residence.


Here is information from their website to help you calculate your CGT obligations and to figure out if you need to pay GST or not: Subdividing and combining land | Australian Taxation Office (ato.gov.au)

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Bruce4Tax(Taxicorn)Taxicorn
25 Mar 2024

If I sell unit B now, do I have to pay capital gain tax ?


Given that the land must be divided, CGT on the valuation just before the development began.


Than the development is a profit-making scheme - taxed as ordinary income.


Can I have to pay GST for selling unit B? I am not developer.


GST will apply - development of new residential property.


If Yes, Do I need apply Margin Scheme GST for this case? How to apply for Margin Scheme?


Yes - Best to go to a local tax agent experienced with property.


Do I need apply "Your foreign resident capital gains withholding clearance certificate" for this case?


If sale = 750 K or more




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