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Cost base adjustments for capital works deductions

Last updated 3 March 2016

In working out a capital gain in respect of property that you used to produce assessable income – such as a rental property or business premises – capital works deductions you claimed, or were entitled to claim, may need to be excluded from the cost base and reduced cost base.

For information on when property (for example, a building, structure or other capital improvement to land) is treated for CGT purposes as a CGT asset separate from the land, see chapter 1 and Major capital improvements to a dwelling acquired before 20 September 1985.

You must exclude from the cost base of a CGT asset (including a building, structure or other capital improvement to land that is treated as a separate asset for CGT purposes) the amount of capital works deductions you claimed or were entitled to claim in respect of the asset if:

  • you acquired the asset after 7.30pm (by legal time in the ACT) on 13 May 1997, or
  • you acquired the asset before that time and the expenditure that gave rise to the capital works deductions was incurred after 30 June 1999.