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tvadera(I'm new)I'm new
10 Nov 2024

Hi All,


I am living in an existing property (current PPR) with a mortgage. The current PPR is exempt from land tax.


I have purchased another established property on 03 Aug 2024 with settlement in Nov 2024. I intend to knock down the newly purchased property and commence construction of a home which can take up to 2 years to complete. The new purchase would be my new PPR and I would move in once construction is completed. It would not generate any income as it would go straight from settlement to construction.


I will be living in existing property till construction is completed. I may keep the old property post for investment or sell it post construction.


Questions

  1. Do I treat the new purchase as PPR and current property as investment even when I am living in current property till construction is completed?
  2. How do I notify SRO/Land tax of property which would be exempt for land tax (current property or new purchase)
  3. How would the CGT be determined for existing property and new property if they are sold in future?
  4. What records do I need to keep for CGT purposes?

259 views
2 replies
259 views
2 replies

Most helpful response

Most helpful reply

Taxduck(Taxicorn)Taxicorn
11 Nov 2024

Question 1. For CGT purposes you can choose which property you want to be your main residence. The new property can be considered you main residence for a period of up to 4 years before you move in, while it is being constructed. See the rule here

Building or renovating your home | Australian Taxation Office

Question 3. CGT is calculated using the following formula.

Sale price - cost base = gain x days property not main residence/days of ownership.

See cost base elements

Cost base of assets | Australian Taxation Office

All replies

sydauthor(Master)Master
11 Nov 2024

  1. Current until you move in.
  2. They’ll determine it and you seek an exemption when the time comes.
  3. Date when you purchased and sell existing property. Date when you move in and sell new property.
  4. EVERYTHING. Have one folder containing all your records for your existing property. Another folder for your new one.

Most helpful reply

Taxduck(Taxicorn)Taxicorn
11 Nov 2024

Question 1. For CGT purposes you can choose which property you want to be your main residence. The new property can be considered you main residence for a period of up to 4 years before you move in, while it is being constructed. See the rule here

Building or renovating your home | Australian Taxation Office

Question 3. CGT is calculated using the following formula.

Sale price - cost base = gain x days property not main residence/days of ownership.

See cost base elements

Cost base of assets | Australian Taxation Office

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