Generally, in Australia, you are not taxed on gains from the sale of your home (including up to 2 hectares of adjoining land). This is because of the ‘main residence exemption’ within the Capital Gains Tax (‘CGT’) part of the tax law. However, when you subdivide the land on which your main residence stands, this can create tax risks that people often don’t foresee and which can result in major tax liabilities, including:
Given the complexity of these issues and the varying treatment of different periods of time and use of the dwelling/s, it is easy for people to unintentionally trigger potentially significant adverse tax consequences, if they are not properly advised on how best to proceed right from the outset.
Our lawyers here at Waterhouse Lawyers are experienced in providing advice on tax issues for property development, subdividing land and CGT main residence exemption claims, so we are here to help manage these risks. Please contact us on 02 9252 8746, email@example.com or through our contact page.