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Re: CGT on Vacant land 2.02 hectares

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Newbie

Views 579

Replies 10

Hello,
I would appreciate some advice about the calculation of CGT applicable on vacant land in Victoria that I would like to sell after 18 years of ownership.

We are likely to sell above what we purchased it for, and would like to know if we can claim the 50% CGT reduction. The land is 2.02 hectares (4.9acres)

Many thanks in advance.
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Most helpful response

Community Support

Replies 5

Hi @Sarahmc 

 

Welcome into the community!  

Establishing your cost base + whatever expenses you are allowed to add to it are where you can begin. See Vacant land prior years. It should help you work out what applies to your senario. I suspect you may be rather straight forward and come in under Land as a capital asset. As to how to work out a capital gain or loss see The discount method of calculating our capital gain this should help. Remember too that if the title is in two names then the CGT will be spread between both parties and also the day the contract for sale is sold will determine which tax year the gain will be reported in. All things that can help manage any CGT obligation.

 

MarkATO

10 REPLIES 10
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Community Manager

Replies 1

Hi @Sarahmc 

 

Good question! We're going to look into this one and get back to you with an answer soon Smiley Happy

 

Thanks, Nate

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Newbie

Replies 0

Thank you!
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Devotee

Replies 1

Hello,
To help you with this, I would need to know some more information. What was your intention with the property? Did you buy it to build an investment property on? Was it you as an individual that purchased it or a business?

If you don’t mind giving me a bit more info I would be happy to help
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Newbie

Replies 0

Hello,
Thank you for helping me with this question.
I bought the property as an individual, not as a business. I always intended to live there, and built a shed there and obtained quotes for a house to be built as a primary residence.
Is this the type/degree of information that helps you?
Thanks again
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Most helpful response

Community Support

Replies 5

Hi @Sarahmc 

 

Welcome into the community!  

Establishing your cost base + whatever expenses you are allowed to add to it are where you can begin. See Vacant land prior years. It should help you work out what applies to your senario. I suspect you may be rather straight forward and come in under Land as a capital asset. As to how to work out a capital gain or loss see The discount method of calculating our capital gain this should help. Remember too that if the title is in two names then the CGT will be spread between both parties and also the day the contract for sale is sold will determine which tax year the gain will be reported in. All things that can help manage any CGT obligation.

 

MarkATO

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Newbie

Replies 4

Hi MarkATO,
Thank you for that advice and information. I might be missing something obvious (my apologies if I am!) but I am still not categorically sure whether the size of the block (being just a bit larger than 2 hectares) affects whether I can claim the 50% reduction on my calculation of CGT. When I have tried to use the ATOs CGT calculator, I have read that it excludes land larger than 2 hectares. Any advice on this?
Many thanks,
Sarah

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Community Support

Replies 3

Hi @Sarahmc,

 

Thank you for your response and I appreciate the confusion around it. The website advises - To work out your capital gain or loss you can use the link. For CGT discount under eligibility it advises - You can use the discount method to calculate your capital gain if:

  • you're an individual, trust or complying super fund
  • the capital gain tax (CGT) event happened to your asset after 11.45am (by legal time in the ACT) on 21 September 1999
  • you acquired the asset at least 12 months before the CGT event
  • you did not choose to use the indexation method.

There is further information under CGT discount that you may wish to peruse.

 

Hope this helps.

 

Regards,

Jodie2.

 

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Newbie

Replies 2

Hi @Jodie2,
Thank you for responding with that detail, and helping with my confusion!
Just to be clear, in the information you provided, it talked about dwellings located on greater than 2 hectares. Although mine is a vacant block, can I assume that at least the first 2 hectares of my 2.02 hectare block would be eligible for the 50% CGT reduction?
Thanks,
Sarah
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Community Support

Replies 1

Hi Sarahmc,

 

Thank you for your reply. Apologies for the initial response I provided. I have updated the information as the main residence exemption does not apply to you. You can use the link for CGT discount link, eligibility conditions are listed.

 

Regards,

Jodie2.