Property CGT Workpaper — JSA Accounting & Taxation

STEP 1The property, and the two contract datesCGT event A1 — s 104-10

Use contract dates, not settlement dates. The CGT event happens when the sale contract is signed, and that is also the day the client's residency is tested. Settlement dates are recorded for the file but do not drive the calculation.

Property address Client / file reference Prepared by Purchase contract dateDate the purchase contract was signed Purchase settlement dateRecord only Sale contract dateDrives the whole calculation Sale settlement dateRecord only Purchase price $What the client paid — the first element of the cost base Gross sale price $ Land area over 2 hectares? Part of the home used for income? Home office, consulting room, rented bedroom Client's other taxable income $Feeds the estimated tax on the disposal in the results Marginal rate override %Optional — overrides the bracket-based tax estimate

STEP 2Market value resets 118-192 · s 128-15(4)

STEP 3Three questions that shape this workpaperanswer these before going further

Each Yes opens an extra section further down. If everything is No, the workpaper stays short.

Were the ownership interests acquired at different times? For example, half bought in 2004 and the other half inherited when a co-owner died. Answer No if the client bought the whole property in one transaction.

No Yes

Has the client’s tax residency changed at any time since the property was purchased? Was the client a foreign resident for tax purposes at any point during ownership — working overseas, or leaving Australia. If Yes, the exemption and the discount both change.

No Yes

Did the client own another dwelling at the same time as this one? A second home, a holiday house, or an overlap while moving. Only one dwelling can be the main residence at a time.

No Yes

STEP 4How the property was used, from start to sales 118-145 · s 118-185

Enter every period from the day the client acquired the property until the sale contract date, with no gaps. An absence period only counts if the client lived there first. Every time they move back in, the six-year clock starts again.

From	To	What was happening

Six-year cap (days)

STEP 5Ownership interest and how it was acquiredDiv 110 · Div 128

One interest, acquired in a single transaction. Choose whether it was purchased or inherited.

One block for each interest. Shares must add to 100%. Add a block for each separate acquisition — the purchased portion and the inherited portion are calculated independently, because they have different acquisition dates and different cost bases.

STEP 6Costs — itemiseds 110-25 · s 110-35 · s 110-45

Every line is a separate item so nothing is missed. Set each line to Have it, Need it or N/A — anything left on Need it is listed at the bottom of the workpaper as an outstanding request for the client. Shaded lines are not cost base items and are shown so staff know why they were excluded.

Selling costs — second element, this disposal

Holding costs — third element, non-deductible costs of ownership

Third element costs are only available for property acquired after 20 August 1991, and only for the portion that was never deductible. Enter the full amount for the whole time the client owned the property — the workpaper automatically excludes the days it was rented, using the periods entered in Step 4, since those days already carried a tax deduction. They are also excluded from the reduced cost base, so they cannot create or increase a capital loss. s 110-25(4), s 110-55(2)

Capital improvements and building write-off

Capital improvements $Structural additions, extensions, new kitchen — fourth element Div 43 capital works claimed or claimable $Reduces the cost base whether or not it was actually claimed Quantity surveyor report on file?

Plant and equipment — Division 40

Sale proceeds attributed to plant $ Adjustable value at disposal $ Plant cost inside the purchase price $ Depreciation schedule on file?

Plant is a separate asset. Its share of the proceeds comes out of capital proceeds and its cost comes out of the cost base; the difference is a balancing adjustment taxed as ordinary income or claimed as a deduction, outside the CGT calculation.

STEP 7Residencys 118-110(3) · s 115-115

A client who is a foreign resident on the sale contract date gets no main residence exemption at all — not even a partial one for the years they lived there. The discount is separately reduced for foreign-resident days after 8 May 2012.

Is the client an Australian tax resident at the sale contract date? Residency evidence on file?

Life events test is satisfied — foreign resident for a continuous period of six years or less and a listed life event occurred (terminal illness of the client, spouse or child under 18; death of a spouse or child under 18; or a formal agreement on relationship breakdown). Ticking this restores the exemption.

Treat the past non-resident days as taxable — deny the main residence exemption for the days the client was a foreign resident, even though they are a resident at the sale date. This is a stricter-than-standard treatment. The standard ATO position bases the partial exemption on main-residence use, not tax-residency status during ownership. The discount is reduced for those days regardless. Untick to follow the standard rule.

Periods of foreign residency

Enter the periods the client was a foreign resident. Any day not listed is treated as Australian residency.

From	To	Status

STEP 8The second dwelling, and which one carries the exemptions 118-170 · s 118-140

Enter the days the second dwelling is being nominated as the main residence. Any day nominated to both is taxed on this property, apart from the six-month changeover window before a sale.

Second dwelling Its cost base $ Its expected sale proceeds $ Its ownership period, in days

Days nominated to the second dwelling

From	To	Nominated as

Which dwelling should carry the exemption?

CHECKOwnership timelineexempt days in blue, taxable days in red

Lived in as main residence Absent and rented, within six years Absent, not rented Taxable day Second dwelling nominated Foreign resident

RESULTCapital gains tax calculations 102-5 · s 115-100

CHASEInformation still to obtain from the clientevery line left on “Need it”

FILEWorking notes and exportaudit trail

Legislative basis — for review and file notes

Full main residence exemption: A gain on a dwelling that was the main residence for the whole ownership period is disregarded. s 118-110
Absence rule — the six-year rule: A dwelling that ceases to be the main residence may still be treated as the main residence. Where it produces income that treatment is capped at six years, with a fresh six years each time the dwelling again becomes and ceases to be the main residence. Where it produces no income the treatment is indefinite. No other dwelling can be the main residence while the choice applies. s 118-145
Partial exemption: Gain × non-main-residence days ÷ days in the ownership period. s 118-185
Home first used to produce income: Where the dwelling was first rented, or first made genuinely available for rent, on or after 20 August 1996, and a sale immediately before that day would have been fully exempt, the client is taken to have acquired the dwelling at its market value on that day. Not a choice — it applies automatically. Original stamp duty is not picked up, and the ownership period restarts. s 118-192
Part of the home used for income: The exemption is reduced by the income-producing proportion, normally measured by floor area. s 118-190
Six-month changeover: Two dwellings can be the main residence for up to six months where the old one is being sold, provided it was the main residence for a continuous three months in the twelve months before disposal and was not income producing in any part of that twelve months when it was not the main residence. s 118-140
Inherited dwelling — cost base: Deceased acquired before 20 September 1985: market value at date of death. Acquired on or after that date: the deceased's cost base, unless the dwelling was the deceased's main residence just before death and was not then income producing, in which case market value at date of death. s 128-15(4)
Inherited dwelling — full exemption: Where the dwelling was the deceased's main residence just before death and not then income producing, or was a pre-CGT asset of the deceased, and either settlement occurs within two years of death or the dwelling was from death to disposal the main residence of the spouse, a person with a right of occupancy under the will, or the beneficiary. The Commissioner may extend the two years; safe harbour in PCG 2019/5. s 118-195
Inherited dwelling — partial exemption: Apportioned across a period beginning at the deceased's acquisition, or at death for a pre-CGT dwelling, counting the deceased's non-main-residence days as well as the beneficiary's. Pre-death non-main-residence days are ignored where the dwelling was the deceased's main residence just before death and not then income producing. s 118-200
Second element — incidental costs: Ten categories of incidental costs, including agent's fees, legal fees, transfer duty, valuation and search fees, on both acquisition and disposal. s 110-25(3), s 110-35
Third element — costs of ownership: Non-deductible rates, land tax, insurance, interest and repairs, for property acquired after 20 August 1991, excluded from the reduced cost base. s 110-25(4), s 110-55(2)
Capital works reduce the cost base: Amounts deducted or deductible under Division 43 are excluded from the cost base and the reduced cost base. s 110-45(1B), s 110-55(6); TD 2005/47; PS LA 2006/1 (GA)
Depreciating assets: Plant is a separate asset. Cost excluded from the property's cost base, proceeds excluded from capital proceeds, and the balancing adjustment taxed under Division 40. Second-hand plant acquired with an established residential property from 9 May 2017 is generally not depreciable. s 110-45(2), s 118-24, Subdiv 40-D
CGT discount: 50% for individuals where the asset was held at least twelve months; for an inherited asset the twelve months runs from the deceased's acquisition. s 115-25, s 115-30 item 4
Foreign residents: No main residence exemption where the client is a foreign resident at the time of the CGT event, unless the life events test is met; discount denied for foreign-resident days after 8 May 2012. s 118-110(3), s 118-115, s 115-105 to s 115-115
Withholding at settlement: From 1 January 2025 the rate is 15% with no value threshold, so it applies to every sale. Australian resident vendors must give the purchaser a clearance certificate at or before settlement. Subdiv 14-D Sch 1 TAA 1953
Change coming — contracts from 1 July 2027: The 50% discount is replaced by cost base indexation plus a 30% minimum tax rate on capital gains for individuals, trusts and partnerships, applying to gains accruing from 1 July 2027. The main residence exemption is unchanged. This workpaper applies the current discount and flags any contract dated on or after that day. Treasury Laws Amendment (Tax Reform No. 1) Act 2026; ATO QC107304