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:
- Have you obtained the right market valuations?
- How will your income or gain be taxed?
- What documentation do I need to keep?
- What will happen to my main residence?
Come talk to us about your subdividing plans so you can get the right advice.