What a property report looks like.
One property, every cost from the day the contract was signed, sorted into the capital gains cost base, with the findings and rules that apply. The address, owners and figures are fictional.
8 Ledgerwood Avenue, Brisbane QLD
House and land · 4 bed, 2 bath, 2 car
- Owners
- Two owners, 50/50 joint tenants
- Period
- Contract day (12 Jul 2024) to 30 Jun 2026
- Prepared
- 28 Sep 2026
- Status
- First rent Sep 2026
0Portfolio
1The property and the CGT clock
| CGT acquisition date | 12 Jul 2024 | The land contract date, not settlement |
| Settlement | 14 Nov 2024 | Land held vacant from this date |
| 12-month discount period | Passed 12 Jul 2025 | 50% individual discount available on current rules |
| Building contract | 9 Dec 2024 | HIA stage payments |
| Practical completion | 20 Oct 2025 | Final stage payment |
| First income | Sep 2026 | Holding costs become deductible from here |
2Buying the land
Element 1 · Acquisition · s 110-25(2)
| Date | Item | Source document | Amount |
|---|---|---|---|
| 12 Jul 2024 | Land contract price | Contract of sale; settlement statement | $335,000 |
| Element 1 | $335,000 | ||
The $16,750 deposit, the $268,000 land loan and cash at settlement paid for the price. They are funding, not extra cost.
Element 2 · Incidental costs · s 110-25(3), s 110-35
| Date | Item | Source document | Amount |
|---|---|---|---|
| 14 Nov 2024 | Transfer duty | Settlement statement | $10,150 |
| 14 Nov 2024 | Title registration fee | Settlement statement; land loan statement | $1,160 |
| 14 Nov 2024 | Conveyancing | Conveyancer tax invoice | $1,150 |
| 14 Nov 2024 | Electronic settlement fee | Settlement statement | $140 |
| Element 2 | $12,600 | ||
3Building the house
Element 4 · Capital expenditure · HIA stage payments
| Date | Item | Source document | Amount |
|---|---|---|---|
| 9 Dec 2024 | Deposit, 5% | Builder invoice; bank statement | $20,100 |
| 24 Mar 2025 | Base stage, 15% | Builder claim; construction loan draw | $60,300 |
| 12 May 2025 | Frame stage, 20% | Builder claim; construction loan draw | $80,400 |
| 30 Jun 2025 | Enclosed stage, 25% | Builder claim; construction loan draw | $100,500 |
| 18 Aug 2025 | Fixing stage, 20% | Builder claim; construction loan draw | $80,400 |
| 20 Oct 2025 | Practical completion, 15% | Builder claim; bank statement | $60,300 |
| Building contract | $402,000 | ||
4Finishing it after handover
Element 4 · Capital expenditure · every line a bank debit
| Date | Item | Source document | Treatment | Amount |
|---|---|---|---|---|
| Nov 2025 | Concrete driveway and paths | Tax invoice; bank statement | Div 43 | $23,500 |
| Nov 2025 | Landscaping, turf and garden beds | Tax invoices; bank statement | Soft: cost base only | $15,120 |
| Oct – Nov 2025 | Fencing and gates | Tax invoices; bank statement | Div 43 | $7,280 |
| Nov 2025 | Epoxy garage floor | Tax invoice; bank statement | Div 43 | $3,100 |
| Oct 2025 | Outdoor tiling | Tax invoice; bank statement | Div 43 | $2,400 |
| Oct 2025 | Letterbox | Tax invoice; bank statement | Div 43 | $480 |
| Improvements | $51,880 | |||
5Holding it before the first rent
Element 3 · Costs of owning · s 110-25(4) · vacant land, s 26-102
The property earned no income to 30 June 2026, so none of these could be deducted. That is why they belong in the cost base.
| Date | Item | Source document | Amount |
|---|---|---|---|
| FY2024-25 | Land loan interest, Dec 2024 – Jun 2025 | Land loan statement | $9,620 |
| FY2025-26 | Land loan interest, 12 months | Land loan statement | $15,210 |
| FY2025-26 | Construction loan interest, 12 months | Construction loan statement | $14,890 |
| FY2024-25 | Construction loan interestExcluded: $1,060 deducted, s 110-45(2) | Already claimed in the FY25 return | — |
| Interest | $39,720 | ||
| Date | Item | Source document | Amount |
|---|---|---|---|
| Nov 2024 – Jun 2025 | Rates and water | Council notices | $1,860 |
| Jul – Sep 2025 | Rates and water | Council notice | $820 |
| Oct – Dec 2025 | Rates and water | Council notice | $770 |
| Jan – Mar 2026 | Rates and water | Council notice | $980 |
| Apr – Jun 2026 | Rates and water, new charges only | Council notice, less $1,006 brought forward | $550 |
| Rates and water | $4,980 | ||
| Date | Item | Source document | Amount |
|---|---|---|---|
| 15 Nov 2025 – 30 Jun 2026 | Landlord insurance, 7.5 months of $1,650 a year | Policy schedule | $1,030 |
| Insurance | $1,030 | ||
| Date | Item | Source document | Amount |
|---|---|---|---|
| 14 Nov 2024 | Land tax adjustment paid to seller | Settlement statement | $240 |
| 14 Nov 2024 | Rates adjustment in your favour | Settlement statement | ($1,240) |
| Element 3, net of settlement adjustments of ($1,000) | $44,730 |
6Cost base at 30 June 2026
| Element | Description | Amount |
|---|---|---|
| 1 · Acquisition | Land contract price | $335,000 |
| 2 · Incidental costs | Transfer duty, registration, conveyancing, settlement fees | $12,600 |
| 3 · Costs of owning | Interest, rates, insurance before first rent (never deducted) | $44,730 |
| 4 · Capital expenditure | Build contract, driveway, fencing, landscaping | $453,880 |
| 5 · Title | Costs to establish or defend title | $0 |
| Cost base | $846,210 | |
| Less element 3, not available against a capital loss (s 110-55) | ($44,730) | |
| Reduced cost base | $801,480 | |
Kept out, and why
| Flooring and blinds | Division 40 plant. Depreciated separately and dealt with by a balancing adjustment on sale, not in the cost base. | $2,230 |
| FY25 construction loan interest | Already deducted in a tax return. A cost cannot be claimed and also sit in the cost base. | $1,060 |
| Penalty interest on overdue rates | Not a cost of owning the property. | $27 |
7Findings
- Finding 1Element 2 · Incidental costs
Legal and title costs were understated
An estimate of $1,500 had been used. The documents show three separate charges totalling $2,450. The registration fee was added to the land loan, so it never appeared in the bank account.
Cost base impact+$950Corrected - Finding 2Element 3 · Rates and water
A rates quarter was about to be claimed twice
The April–June notice showed $1,556, but $1,006 of that was the unpaid January–March quarter carried forward. Only $550 was new.
Cost base impact−$1,006Corrected - Finding 3Element 3 · Insurance
Insurance was overstated
A full year had been used, but the policy only started in November. Seven and a half months of a $1,650 premium is about $1,030.
Cost base impact−$620Corrected - Finding 4Element 3 · Interest
Interest already claimed was still in the cost base
FY25 construction interest of $1,060 had been deducted in the tax return and was also counted as a holding cost. It is now removed.
Cost base impact−$1,060Corrected
8Rules that apply to this property
Vacant land period
Holding costs from settlement to handover were not deductible while the land was vacant, so they go into the cost base instead.
ITAA 1997 s 26-102Deducted means excluded
FY25 construction interest was claimed in a tax return, so it stays out of the cost base. Never both.
ITAA 1997 s 110-45(2)Bought before 12 May 2026
Negative gearing for this property is grandfathered under the 2026 rules.
Tax Reform No. 1 Act 2026Capital works deductions
Once rented, about $9,964 a year is deductible, and the cost base falls by the same amount whether it is claimed or not.
ITAA 1997 Div 43New build and capital gains
For gains after 1 July 2027, new builds may keep the 50% discount. Confirm how it applies with your accountant.
Tax Reform No. 1 Act 2026Records for the life of the property
Keep every document until at least five years after the property is sold, not just seven years from purchase.
ATO record keeping9From FY2026-27, the cost base starts falling
Once rent starts, holding costs are deducted against rent instead of adding to the cost base, and capital works deductions (Division 43) reduce the cost base every year whether or not they are claimed.
| Building contract | $402,000 |
| Less plant inside the build, assumed 10% | ($40,200) |
| Qualifying structural improvements | $36,760 |
| Capital works base, indicative | $398,560 |
| Each year at 2.5%, and the yearly fall in cost base | $9,964 |
| Holding period | Div 43 claimed | Cost base | Extra CGT at 39%, after discount |
|---|---|---|---|
| Today | — | $846,210 | — |
| After 5 years | $49,820 | $796,390 | $9,715 |
| After 10 years | $99,640 | $746,570 | $19,430 |
| After 15 years | $149,460 | $696,750 | $29,145 |
10Worked example: a sale in FY2030-31
Illustrative arithmetic, not a valuation. Uses the current 50% discount and ignores the new rules for gains after 1 July 2027.
| Sale price, assumed | $1,000,000 |
| Less selling costs, about 3% | ($30,000) |
| Cost base after 5 years of Division 43 | ($796,390) |
| Capital gain | $173,610 |
| Each owner's half, after the 50% discount | $43,403 |
Everything on this page is for educational and informational purposes only. Costs, prices, interest rates, rules and government schemes change over time, and the figures shown are approximate examples that may already be out of date. Nothing here is financial, tax, legal, building or professional advice, a recommendation or a quote. Do your own research, get written quotes and seek advice from qualified professionals before making any decision.
PropertyMaths is being built by GetPost Labs Pty Ltd, a technology company. We are not financial, tax, legal or property advisers. The information here is our own research, shared to show what a product for property owners and investors could do.