What is a "Cost Base" and why does it matter?

Your "Cost Base" is essentially the total price you have paid to own and improve your property. It is the number the ATO uses to calculate your Capital Gains Tax (CGT) when you eventually sell.

Key Concepts

• Purchase Price: The initial amount you paid for the property.
• Incidental Costs: Stamp duty, legal fees, and agent commissions.
• Capital Improvements: The cost of renovations, extensions, or major upgrades (e.g., a new roof).

How it works in PropKeeper

PropKeeper tracks your Cost Base by totaling your purchase price and any expenses you categorize as "Capital Works."

$$Capital Gain = Sale Price - Cost Base$$

Why Tracking Matters

The higher your Cost Base, the lower your taxable capital gain. If you don't track your receipts for a kitchen renovation done five years ago, you may end up paying tax on "profit" that was actually just you reinvesting into the home.

Pro Tip

Keep a digital copy of every receipt in PropKeeper. Physical receipts fade over time, but a digital log ensures that when you sell in 10 or 20 years, you have the proof required to minimize your tax bill.