{"id":9078,"date":"2016-08-21T01:00:35","date_gmt":"2016-08-20T15:00:35","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=9078"},"modified":"2016-08-21T01:00:35","modified_gmt":"2016-08-20T15:00:35","slug":"when-to-subdivide-and-the-costs","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/when-to-subdivide-and-the-costs\/","title":{"rendered":"When to subdivide and the costs &#8211; Ken Raiss"},"content":{"rendered":"<p>&nbsp;<br \/>\nThe master of questions &#8211; <strong>Ken Raiss<\/strong> from Chan &amp; Naylor answers a two part question from Daryl about vacant land, GST and subdivision.<br \/>\n&nbsp;<\/p>\n<h4><strong>Transcript:<\/strong><\/h4>\n<p><b>Kevin:<\/b>\u00a0 Joining us once again to answer your questions, Ken Raiss from Chan &amp; Naylor.<br \/>\nGood day, Ken. How are you doing?<br \/>\n<b>Ken:<\/b>\u00a0 I\u2019m well, thanks, Kevin. And yourself?<br \/>\n<b>Kevin:<\/b>\u00a0 Mate, I\u2019m fantastic, thank you. Always good to hear from you. And these are always questions that I can\u2019t answer, Ken. That\u2019s why we come to you because you\u2019re our expert on these ones.<br \/>\nKeep the questions coming in, too, for any of our experts. We\u2019d love to answer your questions. Just do them through the website. Ask a question. Tell us what that question is and we\u2019ll get an answer for you.<br \/>\nThis one comes from Daryl. It\u2019s in two parts. I\u2019ll read it in two parts, Ken. The first one \u2013 and Daryl does point out that he\u2019s not referring here to a principal place of residence \u2013 the first part of the question is \u201cIs GST payable if you are buying a block of land that already has two lots on one title? Split the block and sell them individually? If you\u2019re not registered for GST and bought under personal names or trust structure, I know that tax will be payable, either GST or income tax, but I\u2019m not sure if GST is payable because the lots already exist.\u201d<br \/>\nSo here we have a situation, Ken, I guess, one title but two lots. I would have thought two lots would require two different titles.<br \/>\n<b>Ken:<\/b>\u00a0 It depends what they\u2019re doing. You can actually have the ability to have two lots on one title, and then you just complete the subdivision, of course. Unless, of course, sometimes you can have two buildings and have dual occupancy, and then you have the one title.<br \/>\nGST is a funny creature because it depends on two things: your intent and also the transaction itself. Let\u2019s have a look at intent to start off with. But before I talk about intent, I\u2019ll just preface by the fact that GST is not normally payable on residential property \u2013 unless it is new.<br \/>\nSo if you buy a property with the intention to build, subdivide, and then sell or any of that, then you\u2019re effectively in business and you would have normally had to register for GST, and then there\u2019s a GST implication.<br \/>\nIf, however, you are an investor and you purchase something with the intention to keep and use to generate taxable income and then you subsequently sell the residential property, then you didn\u2019t have to register for GST, and as such, on the sale, you didn\u2019t have to pay GST.<br \/>\nIt\u2019s fairly complicated, and I would certainly seek very specific advice on a transaction-by-transaction basis. It really doesn\u2019t make any difference what the structure is, whether it was your personal name, a company, or a trust. There\u2019s obviously capital gains tax implications and income tax, and if your intention was to buy and sell, then you would not have capital gains tax; it would just be normal income tax at your marginal tax rate. If you bought something with the intention to keep and then you subsequently sell, then it\u2019s a capital gains tax.<br \/>\nA number of parts to that question. I appreciate it\u2019s probably a complicated scenario. Hopefully I\u2019ve answered it, but please, on any GST, I would get independent, specific advice because there are many nuances to this.<br \/>\n<b>Kevin:<\/b>\u00a0 Daryl goes on to then ask the question about if he owned the house for three plus years then decided to split the block, is GST payable then?<br \/>\n<b>Ken:<\/b>\u00a0 Again, it comes back to intent. If you had secured that property, built that property, with the intention to keep it, then you wouldn\u2019t have registered for GST and GST would not normally be applicable on the sale. If you did that transaction with the intention to sell, then obviously you would have had to register for GST and GST is payable. The issue then becomes if you change your intent and you needed to then register for GST, you have to be careful there.<br \/>\nAn area that is normally overlooked is what is a new residential property? It is not just a brand new building that you built from the ground up. A substantially improved residential property becomes new because it\u2019s nothing like what it was before the improvement. Again, get specific advice to see whether the renovation you\u2019re doing turns it into a new property or it maintains its existing status.<br \/>\n<b>Kevin:<\/b>\u00a0 Very good. Daryl, there\u2019s a great answer to your questions. Ken, I want to thank you once again for giving me some time.<br \/>\nKen Raiss, of course, is from Chan &amp; Naylor. Thanks for your time, Ken.<br \/>\n<b>Ken:<\/b>\u00a0 Thank you very much, and thank you, listeners.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; The master of questions &#8211; Ken Raiss from Chan &amp; Naylor answers a two part question from Daryl about vacant land, GST and subdivision. &nbsp; Transcript: Kevin:\u00a0 Joining us once again to answer your questions, Ken Raiss from Chan &amp; Naylor. Good day, Ken&#8230;.<\/p>\n","protected":false},"author":176692471,"featured_media":9079,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[34,10,11,13,35,17,22,25],"tags":[101],"class_list":["post-9078","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-development-topic","category-property-investment","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>When to subdivide and the costs - Ken Raiss - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/when-to-subdivide-and-the-costs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When to subdivide and the costs - Ken Raiss - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; The master of questions &#8211; Ken Raiss from Chan &amp; Naylor answers a two part question from Daryl about vacant land, GST and subdivision. &nbsp; Transcript: Kevin:\u00a0 Joining us once again to answer your questions, Ken Raiss from Chan &amp; Naylor. 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