Taxation Determination

TD 92/132

Income tax: property development: if land is trading stock, do related interest costs, council rates and land taxes, form part of the cost price for trading stock valuation purposes?

  • Please note that the PDF version is the authorised version of this ruling.
    This ruling contains references to repealed provisions, some of which may have been rewritten. The ruling still has effect. Paragraph 32 in TR 2006/10 provides further guidance on the status and binding effect of public rulings where the law has been repealed or repealed and rewritten. The legislative references at the end of the ruling indicate the repealed provisions and, where applicable, the rewritten provisions.
    This document has changed over time. View its history.

FOI status:

may be releasedFOI number: I 1213013

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue.

1. No. If land is acquired by a business as trading stock, interest, council rates and land tax incurred on and after the acquisition of the land do not form part of the cost price for the purposes of subsection 31(1) of the Income Tax Assessment Act 1936 (the Act). These costs are incurred in holding the land whether or not it is subject to any future development.

2. Provided the requirements of the Act are met, related interest, council rates and land tax are deductible in the year in which they are incurred.

Commissioner of Taxation


ATO references:

ISSN 1038 - 3158

Related Rulings/Determinations:

TD 125

Subject References:
valuation of land as trading stock;
property development;
trading stock

Legislative References:
ITAA 31(1)

TD 92/132 history
  Date: Version: Change:
  30 July 1992 Original ruling  
You are here 29 November 2006 Original ruling + note Repeal provision note