Got a Home on More than 2ha – You need to know about Curtilage and Capital Gains Tax

A client came to us anxious about a potential $100,000 ATO Capital Gains Tax bill on the sale of a 4ha rural residential property, as Capital Gains Tax applies to properties larger than 2 ha even when owner occupied.   

 With knowledge of the Curtilage principle and detailed market analysis we saved that client approx. $100,000 in Capital Gains Tax. 

Not all property and financial advisers know about this CGT exemption that can be claimed for the dwelling on up to 2ha known as Curtilage -

AND a higher proportion of value is in the 2ha curtilage area, with land outside that area worth considerably less.  In this case after researching sales evidence, we found that there was a nominal difference between the value of 2ha rural/residential lots selling in the area versus 4 ha rural/residential lots. 

Also captured in the Curtilage area exemption were improvement works that the owner occupier had done to the dwelling – otherwise the added value of those owner occupier works would have been taxed as well.

As a consequence of the Curtilage area exemption and the apportionment of values in our valuation report, our clients capital gains tax liability was assessed on a gain of less than $10,000 rather than the full amount.

What a difference engaging the right valuer and getting the right advice can make.   Another very satisfied client (and their accountant) able to talk about their reduced tax bill and much improved financial outcome that Leeson Valuers and Jock Wigan were able to help them with.