Cost Base Records to retain for your Holiday Home

Holiday Home July Newsletter

Cost Base Records to retain for your Holiday Home


Keeping records of holiday homes is a difficult task. Disposing of records that should be kept could cost you when you come to sell your property. Holiday homes, if not your main residence, when sold trigger a Capital Gains Tax (CGT) event (if the property was purchased on or after 20 September 1985) so it is important to keep accurate records to work out the correct cost base of the holiday home.

The following is a list of potential records that a holiday home owner should keep for Cost Base and CGT purposes:

  • Purchase Contract – including stamp duty costs
  • Contract of Sale
  • Settlement Statement of purchase and sale
  • Legal Fees on purchase and sale
  • Loan agreements, including any refinancing and loan finalisation documents
  • Tenancy Application Forms
  • Agents Commission on Sale
  • Communication between tenants, your agent and yourself

If depreciating assets are included in the sale, there needs to be an apportionment of capital proceeds between the property and the Closing Written Down Value of the Assets.

Expenses as part of the cost base?

Expenses that would generally be deductible, can be added to the cost base of your holiday home if the property is unoccupied. Please note that to do so, the property must be available for rent and there needs to be evidence that the property is properly advertised to be available for rent during those periods. Expenses are excluded if the property is used for private purposes only.

Below is a list of potential expenses that are added to the cost base, if the property is vacant but available for rent, that a property owner should keep record of:

  • Council and Water Rates
  • Insurance
  • Land Tax
  • Maintenance Costs
  • Interest of Borrowings

Renting Out Your Holiday Home

It is important to note that the ATO is setting its sights on mistakes, errors and false claims on rental property owners using their own property for personal holidays.

A way of preventing the over claim of rental deductions during the year is to keep a log book. The log book will indicate when the property was rented, available for rent or used for private purposes and will enable you to claim correct deductions during the financial year.

Should you require further information on the above, or have any questions about how this might impact you, please don’t hesitate to contact your engagement partner on 02 9283 1666.

Article by Chris Kirkwood