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  • Acquisition and disposal costs



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    You cannot claim a deduction for the costs of acquiring or disposing of your rental property. Examples of expenses of this kind include the purchase cost of the property, conveyancing costs, advertising expenses and stamp duty on the transfer of the property (but not stamp duty on a lease of property, read the section Lease document expenses). However, if you acquired the property after 19 September 1985, these costs may form part of the cost base of the property for capital gains tax purposes. See also Capital gains tax.

    Example: Acquisition costs

    The Hitchmans purchased a rental property for $170,000 in July 2001. They also paid surveyor's fees of $350 and stamp duty of $750 on the transfer of the property. None of these expenses is deductible against the Hitchmans' rental income. However, in addition to the $170,000 purchase price, the incidental costs of $350 and $750, totalling $1,100, are included in the cost base of the property.

    This means that when the Hitchmans dispose of the property, $171,100 ($170,000 + $1,100) will be taken into account in determining the amount of any capital gain or capital loss.

    End of example

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

    Last modified: 11 Dec 2019QC 16578