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Capital gains tax

Last updated 3 December 2005

If you acquired your rental property, or depreciating assets used in relation to your rental property, after 19 September 1985, capital gains tax may apply when you dispose of the property and the depreciating assets.

You do not make a capital gain or capital loss if you dispose of a depreciating asset after 11.45am (by legal time in the ACT) on 21 September 1999 unless the asset was also used for purposes other than producing income-for example, if you used it partly for private purposes. Note: an amount may still be included in assessable income or a deduction allowed in the income year in which the asset is disposed of under the rules dealing with depreciating assets (see What happens if you no longer hold or use a depreciating asset?).

If you disposed of a rental property and you have claimed capital works deductions for construction expenditure (see Capital works deductions (formerly special building write-off)), those deductions may be excluded from the cost base or reduced cost base of the property. See Deductions affecting CGT cost base calculations.

For more information, see the publication Guide to capital gains tax.