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Re: Investment property to be demolish and rebuild and beconmes PPOR

Newbie

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Hi, My wife and I own an investment property which was rented from the beginning. If we were to demolish and rebuild and then becomes PPOR, what are the CGT implications?

Do we have to pay CGT now or when sold in the future?

What will be the new cost base? 

How do we value the property? Can be based on average around the suburb? Or do we need to request valuation from the bank and or Real estate agent?

Appreciate your response.

Thanks

 

 

 

1 ACCEPTED SOLUTION

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Most helpful response

ATO Community Support

Replies 1

Hi @Renters,

 

A CGT event will only occur if and when you sell the property.

 

CGT will be calculated from the purchase date (the date on the contract) of the property, right up until the date the property is demolished.

 

In general you will need to have the property formally valued. You can find out more about who may undertake a market valuation and valuation methods under, "Determining market value for tax purposes".

 

The acceptability of a valuation for tax purposes usually depends on the valuation process undertaken rather than who conducted it. However, there are some exceptions where a professional valuer must be used.

 

Links

Determining market value for tax purposes

2 REPLIES 2

Most helpful response

ATO Community Support

Replies 1

Hi @Renters,

 

A CGT event will only occur if and when you sell the property.

 

CGT will be calculated from the purchase date (the date on the contract) of the property, right up until the date the property is demolished.

 

In general you will need to have the property formally valued. You can find out more about who may undertake a market valuation and valuation methods under, "Determining market value for tax purposes".

 

The acceptability of a valuation for tax purposes usually depends on the valuation process undertaken rather than who conducted it. However, there are some exceptions where a professional valuer must be used.

 

Links

Determining market value for tax purposes

Newbie

Replies 0

Thanks for your response.