Your cost base is the sum of all costs that cannot be claimed as income tax deductions. [cite: 447] The higher your cost base, the lower your CGT bill. [cite: 448]
What Goes Into Your Cost Base
- Acquisition costs — Purchase price, stamp duty, legal fees, building inspections. [cite: 449]
- Capital improvements — Adding a deck, renovating a bathroom, installing airconditioning. [cite: 450, 451]
- Ownership costs — Certain rates and insurance not claimed as deductions. [cite: 452]
- Disposal costs — Agent commission, marketing, and legal fees for the sale. [cite: 453]
What Cannot Be Included
Costs you’ve already claimed as income deductions — repairs, property management fees, interest — cannot be included. [cite: 455, 456] You can’t claim the same cost twice. [cite: 456]
Keep Your Records from Day One. When you sell 10 years later, those records directly affect your tax bill. [cite: 458, 459] A shoebox of old receipts could save you thousands. [cite: 460]
References: 1. Real Estate Calc. [cite: 467] 2. Picki. [cite: 468] 3. Australian Property Experts. [cite: 469]