In 2016, my Dad and I went 50% ownership on a block of land. Fast forward to 2024, I have built a house on this land (paid for everything on my own, including all the bills and repayments) whilst my Dad lives at his main residence. My Dad is going to sell his main residence to live here with me and this will become his main residence. Then in two years time we will sell this house. Will this prompt a Capital Gains Tax?
Main residence exemption from CGT is normally only available on a dwelling after you have moved in. So the land can be subject to CGT before the dwelling is built. The current rules allow you to treat vacant land as CGT exempt for a period of 4 years before you build your main residence. If you moved into your residence within 4 years of acquiring the land there would be no CGT implications. (for you) See link
Legally your father has a 50% ownership of the land and dwelling, however you may well be regarded as the beneficial owner. CGT generally is applicable on an asset you legally own (in this case your father would be the one that would shoulder any CGT as this has not been his main residence for the whole period). However you as the beneficial owner may mean that CGT is not applicable (on the dwelling). There are a number of examples about this on line. Here is one.
https://www.ato.gov.au/law/view/view.htm?docid=EV/1052135031813&PiT=99991231235958
Document the agreement between the 2 of you in regard to ownership of the dwelling. (and evidence you may have of paying for all the dwelling costs). Also retain all costs associated with the land (rates, loan interest) while vacant if you exceeded the 4 year rule. When you sell seek professional tax advice. (a private ruling may be required on whether your father is subject to CGT on the dwelling)
Main residence exemption from CGT is normally only available on a dwelling after you have moved in. So the land can be subject to CGT before the dwelling is built. The current rules allow you to treat vacant land as CGT exempt for a period of 4 years before you build your main residence. If you moved into your residence within 4 years of acquiring the land there would be no CGT implications. (for you) See link
Legally your father has a 50% ownership of the land and dwelling, however you may well be regarded as the beneficial owner. CGT generally is applicable on an asset you legally own (in this case your father would be the one that would shoulder any CGT as this has not been his main residence for the whole period). However you as the beneficial owner may mean that CGT is not applicable (on the dwelling). There are a number of examples about this on line. Here is one.
https://www.ato.gov.au/law/view/view.htm?docid=EV/1052135031813&PiT=99991231235958
Document the agreement between the 2 of you in regard to ownership of the dwelling. (and evidence you may have of paying for all the dwelling costs). Also retain all costs associated with the land (rates, loan interest) while vacant if you exceeded the 4 year rule. When you sell seek professional tax advice. (a private ruling may be required on whether your father is subject to CGT on the dwelling)
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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