Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
FoxHoundCo(Enthusiast)Enthusiast
5 July 2021

Hi I just have a follow up question regarding must last question which was in relation to the subdivision of a main residence.

It was confirmed that a property that was a main residence can continue to maintin this exemption for CGT purposes when 2 properties are built and the land is subdivided provided that the taxpayer moves back into the nominated property as soon as possible for at least 3 months. (from point of demolishion it has been within 4 years).

However, if the property is subseqently sold it was confirmed that CGT wont be applicable due to the main residence exemption being in place but will GST be payable upon the sale of the property becuase it is consided a new residental build?

Thank you for your assistance.

1,518 views
5 replies
1,518 views
5 replies

Most helpful response

Most helpful replyATO Certified Response

JodieR_ATO(Community Support)Community Support
ATO Certified Response8 July 2021

Hi @FoxHounCo,

You are correct, if you establish main residence in one of the properties, after the new build is complete, you will not incur GST on that property. Main residences are not looked at for CGT or GST.

The legislation which may impact you is new residential properties (never lived in) and sold for profit. You can check out GST at settlement, this link also includes information under the sub heading 'New residential premises' (which are generally looked at for GST). Residential premises cease to be new residential premises if they have been used solely for renting for a period of at least five years since they were constructed.

If you need further guidance for your specific circumstances please write in to early engagement, they can provide you with a written response including legislative information.

I hope this makes more sense.

All the best.

All replies

Mark1(Devotee)Devotee
5 July 2021

Hi

Potentially yes. Certainly the sale would be a taxable supply for GST as new residential property as "they are new buildings which have been built to replace demolished buildings on the same land."

https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Property/GST-at-settlement/?anchor=Newresidentialpremises2#Newresidentialpremises2

As subdivision has occoured it is likely an enterprise is involved but I'd suggest getting advice or calling 132866 to discuss the GST implications.

This is my personal view; Im an ATO employee who chooses to help out here in my own time

Loading
New build on Main residence (subdivided in 2 blocks) GST implications | ATO Community