My parents have a 2.5 acre property in suburban Brisbane that they've been sitting on for 30 years. After lots of small hints over many years, they are finally opening up to see what their options are with the land. I've been pushing for them or the kids (3 of us) to subdivide and build townhouses on however many we can afford to have a passive income.
For a long time it's been in to "too hard" basket.
After they talked to an accountant a few days ago, they were told that if they subdivided, they'd be considered property developers and Capital Gains Tax would be applied to the value of the land if it was sold/transferred, even to a family member. They should instead sell the entire block. For the record, they did a subdivide about 20 years ago and can't remember paying CGT at the time.
So it's very early days. From looking at the council website, information is pretty complicated to understand, and the process seems daunting. No wonder it's been in the "too hard" basket.
Does anyone have any advice with subdividing? Or CGT? Or even perhaps have some alternative ideas about what to do with the land? Sell?
Thanks!
Yea, I think as it is now, you can't gift property to anyone without paying CGT.