Cost base
The total cost of acquiring and holding a property for capital gains tax purposes, subtracted from the sale price to work out the gain.
- Includes purchase price, stamp duty and legal fees
- Buyer's agent fees are generally included
- A higher cost base means a smaller taxable gain
What is included
The purchase price, stamp duty, conveyancing, buyer's agent fees, inspection costs and capital improvements generally form part of the cost base. Costs already claimed as deductions are usually excluded.
Why records matter
You need records of every cost for the life of the property, which may be decades. Keep invoices and settlement statements.
Buyer's agent fees on an investment property are generally added to its cost base, not claimed as an immediate deduction. Confirm with your accountant.
Common questions
Is stamp duty tax deductible?
Not as an annual deduction for most investors. It is usually part of the cost base.
Does depreciation affect the cost base?
Some capital works deductions reduce the cost base. Your accountant will track this.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.