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Edited version of private advice
Authorisation Number: 1052236565309
Date of advice: 12 April 2024
Ruling
Subject: CGT - cost base
Question
Can architect, surveyor, and City Council application fees be included in the fourth element of the cost base in accordance with section 110-25 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
The fourth element is capital expenditure you incurred:
(a) the purpose or the expected effect of which is to increase or preserve the asset's value; or
(b) that relates to installing or moving the asset.
You incurred the relevant capital expenditure to increase the value of the asset. Therefore, those costs can be included in the cost base in accordance with subsection 110-25(5) of the ITAA 1997.
This ruling applies for the following period:
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
You own the dwellings located at Lot 1 and Lot 2.
In XX 20XX you approached an architect to facilitate the planning and approval of rezoning Lot 1 and 2 and demolishing the dwelling on Lot 1.
The result of this being Lot 1 size would increase and Lot 2 would decrease in size. There would be no change to the existing dwelling on Lot 2.
On XX XX 20XX the City Council approved the following:
• Dwelling house demolition
• Subdivision of land
On XX XX 20XX development approval will end.
You have not proceeded with the demolition or re-zoning of the Lots since receiving approval.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 110-25
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