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?
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FOI status:may be releasedFOI number: I 1213013
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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.
Commissioner of Taxation
valuation of land as trading stock;