EP 24: Understanding CGT Implications of Subdividing Your Principle Place of Residence

Is it worth the effort to subdivide and build a new property or should you just sell the entire property and invest the proceeds elsewhere? 

In today’s podcast, we sat with Sohail Merchant, the Chief Operating Officer for Investor Partner Group. He has extensive experience in property investment and taxation, and he has helped many clients navigate complex tax laws related to property ownership. He shares his expertise and insights as we delve into the topic of main residents and capital gains tax.

They discuss the tax implications of demolishing or subdividing a property in Australia. We answer common questions about the consequences of these actions and explain the main residence exemption for capital gains tax (CGT). We cover scenarios like subdividing land, building a new property, renting out the main residence, and using the home for income-producing activities.

If you’re thinking about these options for your property, tune in to learn about the tax implications and how you can navigate them. 

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Episode Highlights:

• 00:00 Welcome to Helpmebuy Property Podcast
• 01:24 Consequences of Demolishing or Subdividing a Property
• 03:44 The Tax Implications of Subdividing a Larger Block of Land
• 06:43 Three Conditions to Get the Main Residence Exemption
• 12:52 Capital Gains Tax Exemption
• 14:19 The Six-month Rule of an Overlap
• 16:35 Proportion of Capital Gains Tax
• 21:03 Dual Income and the Six-year Rule
• 23:33 Jumping Houses From One Property to Another
• 25:41 Limitation on Tax Records for Property-related Transactions

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