Browse Forums General Discussion 1 Feb 21, 2011 9:02 pm We live in a house that we own (or partly own) and purchased land in April last year. We have a contract for sale on our home and settlement is due 8th March. Soon after settlement we will start building on our land. As our existing home has been our principle place of residence, will we need to have our land valued before we start building on it so that if we ever sell down the track we know what it was worth before we started building our new principle place of residence for capital gains tax purposes??? I guess we can't have an exemption on the land for this period since we already have our existing house. I don't have an accountant. Maybe time to get one Re: Do we need to have a valuation done - Capital Gains Ques 2Feb 22, 2011 9:26 am Definitely get a conveyancer / accountant or something involved to cover your own ***. But from my knowledge, i'm pretty sure you will be fine. Your principle place of residence (lived there for 12 months minimum), doesn't attract capital gains tax. So you won't have to pay anything on the house your currently in. If your planning to live in the new place (for at least 12 months) you wont need to pay capital gains on that either. You would have had to pay stamp duty when you bought the land (based on the value of the empty lot). But building wont matter for you, only your buyer when you sell. If your planning on selling the new place without it becoming your principle place of residence for at least 12 months, then im pretty sure capital gains tax is applicable. It will be what you paid for the land + the cost of construction - the sale price. I don't think the value of land now makes a difference. But like I said, get professional advice. Milesy Re: Do we need to have a valuation done - Capital Gains Ques 3Feb 22, 2011 10:21 am You will only have to pay CGT on the land if it has been used to get you a return (i.e rent or had cattle grazing on it etc), or if you have been claiming the interest payments on the vacant land as an expense on an investment. If the land has been vacant and you have not claimed any expenses as an investment (i.e interest, rates, etc) you are not liable for CGT. If you have claimed expenses better get a registered valuer out before you build. Best to get an accountant to look into it for you. They might be able to advice you to claim the land as an investment for the last couple of years, claim your interest and other expenses (I believe you can go back a few years to carry a loss) and then calculate your GCT. This may end up giving you a quite a few $$$ if your outlays have been greater than a quarter of your Capital Gain. Maybe calculate you cost to hold the land v the capital gain. If the costs exceed 25% of the capital gain (if you have held the land for 12 months +, otherwise 50% of capital gain if the land is held for less than 12 months) then see a GOOD accountant as there could be some cash to come your way. Building an Eden Brae Saville 27 http://karry327.blogspot.com/ Building thread https://forum.homeone.com.au/viewtopic.php?f=31&t=44247 I work with owner, he/she is my man on the ground and I instruct them when to visit the site and take photos and I have other tools in the bag. 4 15275 I am in the same situation, would you be able to give some insights in to this? I am in SA 8 17047 Depends what you're current inclusions are, but we're not including wardrobes and will just use second hand ones until we can save later on to get them built. Also have a… 3 11633 |