Duplex

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An architecturally designed torrens title duplex house in Randwick has been sold for $2.55 million through Century 21 estate agents Nick Papas and Clay Chigwidden.
The 4 <a href="https://www.realestate.com.au/sold/property-duplex+semi-detached-nsw-randwick-133078958" target="_blank">Waratah Avenue duplex home</a> features sleek open plan living and dining which is lit by a glass ceiling area, a gourmet stone kitchen with gas appliances, and entertaining deck surrounded by high tree canopy.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/5/27/5_Randwick%20Outside.jpg" alt="">
The four-bedroom, three-bathroom property has built-in wardrobes, two ensuites, and a loft master suite occupying the entire third floor with a private terrace. 
It was undertaken by the Dilles family.
The neighbouring townhouse set on 185 sqm at 4a was sold for $2,690,000 in December 2019. 
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Brand new designer home in Randwick sold for $2.55 million

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For the first time in 50 years, a historic beachside residence in Bronte sold.
Phillips Pantzer Donnelley estate agents Alexander Phillips and David Tyrrell managed the sale.
The four-bedroom, two-bathroom <a href="https://www.realestate.com.au/sold/property-house-nsw-bronte-132901366" target="_blank">Bronte Road residence</a> is one of only ten properties that backs onto Bronte Park.
The strata-titled duplex sold for around $5 million according to Mr Phillips.
The 308 sqm block was previously divided into two private strata-titled homes, with 114 sqm internally in each duplex. 
The 1940s Art Deco duplex features high ceilings, original fireplace, private entries, open plan dining, a traditional verandah, north-facing gardens, and a basement laundry. 
According to Domain, 22 other four-bedroom houses in the area were recently sold. 
A similar house in the area on St Thomas Street recently sold for $4.1 million in January. 
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Historic beachside Bronte strata-titled duplex sold 

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Hi Margaret,

I currently live in Sydney and on a 970 square metres property, and have been for 27 years now. The property is located approximately 20 kilometres from Sydney CBD.

I am thinking to knock down my existing home, building a duplex and then selling one to finance the construction costs for both. Thereafter, I intend to live in one of them. 

What is the taxation implication on my current and future property (i.e. one of the duplex I plan to live in)? Will I pay tax on both properties? What tax (and deduction) do I need to pay for one of the duplexes I plan to sell?  Can you provide a sample taxation calculation? Is there a correct procedure to minimise my tax?

Thanks in advance.

Cheers! 
Dave 

Margaret's answer on the next page. Please click below.

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Hi Dave,

If you subdivide a block of land, each block that results is registered with a separate title. In terms of capital gains tax (CGT), the subdivision means that you will end up with two separate assets. Subdividing the land does not result in a CGT event if you retain ownership of the subdivided blocks and this means that you don’t make a capital gain or a capital loss at the time of the subdivision.

You are intending the demolish the family home, leaving you with a vacant block. As you bought the original property 27 years ago, you may trigger CGT once you erect the new dwellings and sell one. Your principal place of residence exemption can be applied to one property (likely the one you live in) but the second dwelling will incur CGT.

The date you acquired the subdivided blocks is the date you acquired the original parcel of land and the cost base of the original land is divided between the subdivided blocks on a reasonable basis. Then, the cost of erecting the dwelling on the block you intend to sell will add to the original assessed value of the newly created block to create a cost base for that property.

[smartcode_project:default project_id=94621]

Once you sell you will be charged CGT on any profits you make. As long as the new house and land is kept for 12 months from the contract date to build the new house, then the 50% discount will apply.

I chatted to my Property Success tax expert, Ian Rodrigues, about this and he said that I should add that practically any gain is likely to be in the land, not the building, in such a short time frame. Even over time, most gain is in land and not building value, but it is a matter for a valuer to split the amounts to establish which is worth what.

Regards,

Margaret 

Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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