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  • Building or renovating your home

    Generally, there are no direct tax implications (for income or capital gains tax) if you build or renovate your own home.

    If the dwelling is your main residence and you use any improvements as part of your home, they're exempt from capital gains tax if you sell it. This includes improvements on land adjacent to the dwelling (such as installing a swimming pool) if the total area, including that on which the home stands, is two hectares or less.

    Similarly, you're not liable for GST if you sell your family home. GST is only imposed on sales of new residential dwellings by enterprises. You're not considered to be carrying on an enterprise if your property transactions are for private purposes. (GST is generally included in the price of the goods and services you purchase to build or renovate your home, but because these purchases are for a private purpose, you're not entitled to GST credits.)

    See also:

    Buying to renovate for profit

    You're likely to be entering into a profit-making activity if you acquire a property with the intention of renovating and selling it at a profit, and go about it in a business-like way. This process is also known as 'house flipping', 'property flipping' or buying to flip'. This could have implications for the way the profits are taxed (as income or capital) and for GST.

    See also:

    Last modified: 03 Aug 2017QC 23623