Record Keeping for CGT purposes

The following records must be kept as they form part of the cost base (used to work out if a capital gain or loss occurs)

1. A copy of the purchase contract and all receipts for expenses relating to the purchase.

2. All records relating to the CGT event and all relevant expenses.

3. Records of your costs of owing the property (interest, rates, land tax, insurance, repairs)

4. Records of capital expenditure on improvements for extensions, additions and improvements.

For homes used as a main residence, the following records are necessary.

Your Home

If you use your home to produce income (running a business or renting a room such as Air bnb – you will need to keep records of different costs depending on when you aquired the home.

For homes acquired on or after September 1985, you should keep recoreds of expenses during the income producing period and on the proportion of the property used to produce income.

 If you started using your home to produce income for the first itime after 20 August 1996 – you generally need to know your home’s market value at the time you first used it to produce income.

An Inherited Home

Inheriting a home which was the main residence of the person who left it to you means any capital gain on its subsequent disposal (selling the home) may be exempt. Until you are sure of the circumstances, it is advisable to keep records of the relevant costs incurred by you and the previous owner or the trustee or executor. Yo u do not need to keep records if you inherited the dweliing after 20 August 1996, the dwelling was their main residence just before they passed away and they were not using the dwelling to produce income at the time of death.

In these circumstances, you will be considered to have acquired the dwelling at its market value at the date of death.

Records held by your former spouse

Following a relationship or marriage breakdown, it is common for one person to receive the main property. If you receive the main property, ensure you obtain records from your spouse that show how and when the property was acquired and when it was transferred to you.