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Real estate can include such property as the family home, vacant blocks of land, business premises, rental properties, holiday houses and hobby farms.
Even though your family home is usually exempt, if you acquired it on or after 20 September 1985 it is advisable to keep all records relating to the home, just as you would for other items of real estate. If the home ceases to be fully exempt at some time in the future, you will need to know the full cost of the home so that you do not pay more capital gains tax than necessary. If you do not have sufficient records, reconstructing them could be difficult. Refer to Partial exemption for details of when your home may not be fully exempt.
You will need to keep a copy of the purchase contract and all receipts for expenses relating to the purchase of the property e for example, stamp duty, legal fees, survey and valuation fees. You will also need to keep all records relating to the CGT event and all relevant expenses - for example, the sale contract and records of legal fees and stamp duty.
Keep a record of capital expenditure on improvements, non-capital costs and capital expenditure on maintaining title or right to the asset that you incurred during your period of ownership. These costs may form part of the cost base in working out whether you have made a capital gain or loss at the time the CGT event happens.
Capital expenditure on improvements may include building an extension, new paving, pergolas, electrical rewiring or the cost of a new bathroom.
Non-capital costs of real estate may include interest, rates and taxes, insurance premiums, cost of repairs such as cleaning carpets and replacing broken windows. This is not an exhaustive list. You may include only non-capital costs incurred on ownership of a CGT asset acquired on or after 21 August 1991 and only if you are not entitled to a tax deduction for them.
If the property is your home and you use it to produce income, you will need to keep records of the period the home is income producing and the proportion of the home that you have used to produce income.
If, after 20 August 1996, you use your home for income producing purposes for the first time, you will be taken to have acquired your home at that time for its market value. You will use this as your acquisition cost to calculate a capital gain or loss at the time the CGT event happens. You will still need to keep details of expenses relating to your home after the date it became income producing.
Last modified: 18 Sep 2009QC 18323