SearchSub-division tax sums
Rebecca asks:
(updated on Monday, November 19th 2018)
When subdividing a property is the associated reduction in value of the original home/land package able to be deducted from the taxable amount on the subdivision revenue? I assume that the costs of subdivision would also be deductible?
We are currently considering subdivision of a 8000sqm block with an existing home into three blocks, with one being the original home and the other two constituting two sections (2000sqm in size). We expect the subdivision of the two sections to significantly reduce the existing home's value.
I currently do not have a company/partnership set up so as it stands it would all be under a personal taxation liability.
Our Experts Answer:
No, when subdividing you must make a logical apportionment of the original cost of the property against the three new lots. Generally, this would be done by splitting the land from the building using a valuation, CV or RV. Having then identified the land cost alone this would generally be split relative to the sqm of each of the resulting lots. Tax is then based on the sale price of the lots less the allocated original cost of the land acquisition and the actual costs to subdivide.
Most Read
| Unity First Home Buyer special | 3.99 |
| ICBC | 4.25 |
| SBS FirstHome Combo | 4.29 |
| Co-operative Bank - First Home Special | 4.35 |
| TSB Special | 4.39 |
| Co-operative Bank - Owner Occ | 4.45 |
| ASB Bank | 4.49 |
| SBS Bank Special | 4.49 |
| Unity Special | 4.49 |
| Westpac Special | 4.49 |
| Kiwibank Special | 4.49 |
| Westpac Special | 4.45 |
| SBS Bank Special | 4.49 |
| BNZ - Std | 4.49 |
| Kiwibank Special | 4.49 |
| TSB Special | 4.49 |
| AIA - Go Home Loans | 4.49 |
| ASB Bank | 4.49 |
| Co-operative Bank - Owner Occ | 4.49 |
| ICBC | 4.59 |
| Wairarapa Building Society | 4.59 |
| Unity Special | 4.65 |
| SBS Bank Special | 4.99 |
| Westpac Special | 4.99 |
| ICBC | 4.99 |
| BNZ - Std | 4.99 |
| AIA - Go Home Loans | 5.15 |
| ASB Bank | 5.15 |
| Co-operative Bank - Owner Occ | 5.19 |
| ANZ | 5.39 |
| TSB Special | 5.39 |
| Kiwibank Special | 5.39 |
| Kainga Ora | 5.49 |
| SBS FirstHome Combo | 3.29 |
| AIA - Back My Build | 3.34 |
| SBS Construction lending for FHB | 3.74 |
| CFML 321 Loans | 4.25 |
| Co-operative Bank - Owner Occ | 4.99 |
| Co-operative Bank - Standard | 4.99 |
| Heartland Bank - Online | 5.30 |
| ICBC | 5.39 |
| Kiwibank - Offset | 5.65 |
| Kiwibank | 5.65 |
| ANZ | 5.69 |
