Keep Accurate CGT Records and Save on Tax

Selling your investment property for a profit is exciting, but it also means a bigger tax bill. The ATO will want a share of your gains, but keeping detailed records can help you minimise how much you owe. Here’s how to reduce your capital gains tax (CGT) by tracking the right costs:

What Did Your Investment Really Cost?

Your capital gain isn’t just the sale price. It’s the amount you received minus all allowable costs. Keeping detailed records ensures you don’t miss any deductions. Consider these four cost categories:

1. Incidental Costs of Acquisition
   Expenses related to buying the asset, including fees paid to brokers, auctioneers, or accountants, stamp duty, advertising costs, conveyancing fees, and brokerage fees for shares.
   
2. Non-Capital Ownership Costs
   Certain ongoing expenses can be added to the cost base if they haven’t been claimed as deductions, such as loan interest, maintenance, repairs, insurance, rates, or land tax.
   
3. Capital Improvements
   Expenses for enhancing or preserving the asset’s value, including zoning changes, renovations, or structural upgrades.
   
4. Costs of Defending Ownership
   Legal fees for protecting or defending your ownership of the asset, which can also reduce your taxable gain.
   

Offsetting Capital Gains with Losses

If you’ve incurred a capital loss earlier in the year, it can offset your current gain. Additionally, if you have unused losses from previous years, you may be able to apply them as well.

Timing Considerations

Assets acquired before 20 September 1985 are CGT-free. Holding an asset for over 12 months may entitle you to a 50% CGT discount, so consider delaying the sale if you’re nearing the 12-month mark.

Final Tip: Seek Professional Guidance

Good record-keeping can significantly reduce your CGT liability. Contact us to ensure you’re capturing all relevant costs and maximising deductions.

Tommy Li, CA

Director, Verity Advisory  |  Registered Tax Agent  |  Authorised Financial Adviser (ASIC Rep No. 1261831)  |  Member, Chartered Accountants Australia & New Zealand

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Tommy is a Chartered Accountant with 20+ years advising medical professionals on tax, financial structure and practice decisions. He founded Verity Advisory to provide integrated advice for doctors at career-defining financial inflection points — combining tax, lending and financial planning into a single structured approach.