Capital Improvement
Report: Your Answer to Smarter Property Tax Management
A Capital Improvement Report is more than just a document - it’s a tool that empowers Australian property owners to take control of their financial outcomes. Often referred to as a CGT valuation report, it helps property investors and homeowners reduce their CGT liability by accurately calculating the cost base of their property. Read more
What’s A Capital Improvement Report?
A Capital Improvement Report is a professional valuation that identifies and quantifies the value of capital improvements made to a property. These improvements are structural changes or additions that increase the property’s value, extend its useful life, or adapt it for new uses. Examples include renovations, extensions, or significant upgrades such as adding a new kitchen or bathroom.
A capital improvement program can help manage and plan these improvements effectively by outlining related projects designed to achieve common goals and understanding related expenses.
For CGT purposes in Australia, the Australian Taxation Office (ATO) requires an accurate calculation of your property’s cost base. The cost base includes the original purchase price plus eligible expenses like improvements and expenses incurred. These expenses incurred can significantly reduce the taxable capital gain when you sell your property
Without this report, you may risk overpaying CGT or being unable to claim deductions for legitimate costs.
Defining Capital Improvement
A capital improvement is a permanent structural change or restoration of a property that enhances its value, prolongs its useful life, or adapts it to new uses. These improvements can be undertaken by individuals, businesses, and even local governments to enhance the properties they own.
Think of capital improvements as significant investments in your property, similar to capital expenditures (CAPEX) in the business world. Examples include adding a new roof, installing energy-efficient windows, or expanding the living space with an additional room.
One of the key benefits of capital improvements is the potential for favourable tax treatment. In some jurisdictions, certain capital improvements may be exempt from sales tax, providing additional financial incentives for property owners.
When Would You Need A Capital Improvement Report?
There are several situations where obtaining this report is beneficial, such as the following:
Benefits of A Capital Improvement Report
Having a Capital Improvement Report offers several advantages for property owners, including the following:
How We Create the Right Report for You
As one of Australia’s leading specialists in property valuation services, our process is designed to provide
accurate and compliant reports tailored to your needs. Here’s how we do it:
01
Property Assessment
Our quantity surveyors will use the building cost index to calculate the average price of building materials at the time your property was built.
02
Property Assessment
The team evaluates all capital improvements made to the property and calculates their contribution to its overall value. This evaluation is a crucial part of the capital improvement plan process, ensuring that all improvements are documented accurately and managed effectively. Our report aligns with the city's strategic plan to ensure that projects contribute effectively to the city's overall strategic objectives and financial planning.
03
Report Preparation
detailed report is prepared, which can include existing and retrospective valuations if required.
Duo Tax’s expertise ensures that every aspect of your property’s improvement history is captured correctly, giving you peace of mind when it comes to tax time.
Choose Duo Tax for Your Capital Gains Tax Valuation Report Needs
Whether you’re selling an investment property or need clarity on past renovations, this report provides everything needed to make informed decisions about CGT obligations.
By partnering with experts like Duo Tax, you’ll save time while ensuring accuracy and compliance with Australian tax laws. Our team takes care of all the details so you can confidently focus on achieving your financial goals and aligning your Capital Improvement Report with your organisation's larger strategic plan.
Contact Duo Tax today to learn more about how we can assist with your Capital Improvement Report needs!
Disclaimer
It’s worth noting that it’s still up to the ATO’s discretion to approve this report and if you’ll receive tax benefits. The approval depends on various factors, such as whether the property has been your principal place of residence (PPOR) or other specific circumstances.
Different scenarios may influence whether obtaining this report is suitable for you. For example, certain CGT exemptions may apply if the property has been used as your PPOR for most of its ownership period.
Before proceeding with a Capital Improvement Report, consult professionals who can assess your situation thoroughly and provide tailored advice.
How We Create the Right Report for You
Is a Capital Improvement Report Mandatory when selling my property?
While not mandatory in all cases, having a Capital Improvement Report is highly recommended if you want to ensure accuracy in calculating CGT and avoid overpaying taxes. Major capital improvements, such as significant upgrades to HVAC systems and elevators, can greatly impact the necessity and benefits of having this report, as they often involve substantial costs that need to be accurately documented.
What if I don’t have records of expenses incurred for past renovations?
While not mandatory in all cases, having a Capital Improvement Report is highly recommended if you want to ensure accuracy in calculating CGT and avoid overpaying taxes. Major capital improvements, such as significant upgrades to HVAC systems and elevators, can greatly impact the necessity and benefits of having this report, as they often involve substantial costs that need to be accurately documented.
Can I use this report to get tax benefits?
While not mandatory in all cases, having a Capital Improvement Report is highly recommended if you want to ensure accuracy in calculating CGT and avoid overpaying taxes. Major capital improvements, such as significant upgrades to HVAC systems and elevators, can greatly impact the necessity and benefits of having this report, as they often involve substantial costs that need to be accurately documented.
What if the ATO doesn’t accept my report?
While not mandatory in all cases, having a Capital Improvement Report is highly recommended if you want to ensure accuracy in calculating CGT and avoid overpaying taxes. Major capital improvements, such as significant upgrades to HVAC systems and elevators, can greatly impact the necessity and benefits of having this report, as they often involve substantial costs that need to be accurately documented.
Contact us today to organise your Capital Improvement Report!
Office Hours
Qualified Quantity Surveyors
Why Choose CC?
Value
Our reports provide up to 40 years of depreciation where applicable and we’ll even retrospectively help you claim on previous years you missed out on.
Experience
We’re Australia’s highest-rated Quantity Surveyors. Our Quantity Surveyors have served over 50,000 happy property investors.
Team
With over 50 combined years of experience and a nationwide presence, our Duo Tax process focuses on the most aggressive form of tax depreciation.
Fast
We offer immediate and accurate over the phone estimates and have an average turnaround time of 5 business days.
