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'Tenancy in common' & CGT

Discussion in 'Real Estate' started by Bianca76, 15th Mar, 2008.

  1. Bianca76

    Bianca76 New Member

    Joined:
    15th Mar, 2008
    Posts:
    2
    Location:
    Melbourne, VIC
    My husband and I want to buy a block of land with a couple of friends, build on it and then sell it.

    Becoming 'tenants in common' seems most suitable as our friends have a child and so they need the freedom to deal with their interest if they need to.

    If my husband and I lived in the house as our main residence for at least 3 months after construction (as per CGT guidelines), would we be exempt from capital gains tax when the house is sold?

    Obviously our friends would be CGT liable.

    Am I on the right track or are there different rules for 'tenants in common' and CGT?

    Thanks for your assistance.
    Bianca
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    My pleasure

    PS Before making an estate planning decision speak to an Estate Planning specialist. Also get your will updated...
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    You should also enter into an agreement with your friends to regulate your joint ownership.

    Think about this - if your friends want out - who's going to buy a 1/2 share in the entirety of the property which you own the other half of and are in possession of?

    Whilst it may not be "your" problem but I think in practice your friends' view about the liquity of their position is illusory.

    Each of you should get independent legal advice.

    If you don't want to do that, from memory there's a "Buying a property with Friends" agreement on LawCentral. Tell 'em we sent you.

    Cheers
    N
     
  4. Bianca76

    Bianca76 New Member

    Joined:
    15th Mar, 2008
    Posts:
    2
    Location:
    Melbourne, VIC
    Thank you both for your advice. I will investigate further.