Subdividing your property and Tax

If you live on a large sized block you may have at some stage thought about subdividing.

You might want to subdivide to make some profit, to generate regular rental income or to reduce your backyard maintenance.  You will need to think about what happens when you sell….

Generally, your main residence is not subject to capital gains tax when you sell it, but subdividing your land will create two (or more) separate titles which are now separate assets.  These subdivided properties will have tax implications when you sell them.

A few things to consider are:

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Are you a low income earner?

An individual, who may be a low income earner, may not need to lodge a tax return where their income is below the tax free threshold of $18200.

However there are certain circumstances where you are required to lodge a return even if your income is below the threshold.

If any of the following apply to you, come and talk to us about lodging a tax return:

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Are you a US Citizen in Australia?

The USA is one of very few countries who tax their citizens on their world-wide income no matter where they are living overseas. This means that US citizens who live in Australia are required to also lodge US tax returns with the Inland Revenue Service. If you are a US citizen, living in Australia, it is important to let your Australian accountant know as soon as possible as there can be unforeseen consequences from your Australian business activities if caught up under the USA IRS’s expansive rules and regulations.

Photo Courtesy of Wikimedia Commons: By James Montgomery Flagg (http://www.usscreen.com/american_spirit/) [Public domain]

Have you lodged your tax return yet?

For those who do not have a tax agent – have you lodged your tax return yet?

The clock is ticking for you to lodge your 2017 tax return!

You only have up to 31 October 2017 to lodge your 2017 tax return to the ATO without incurring a late penalty plus interest charges.

For those thinking of getting help from a tax agent, you need to get in touch with your tax agent by 31 October 2017 otherwise you will miss out the extra lodgment extension of up to May 2018!

What are you waiting for? Stop procrastinating and get moving!

If you need help with preparing and lodging your 2017 tax return, contact us!