Kamal purchased a new rental property on 3 July 2018 and immediately rented it out earning $520 per week in rental income. He paid the following amounts in relation to the property.

                                                                                    $

Purchase price                                                400,000
Stamp duty on purchase                                   3,500
Legal fees to transfer title to him                    1,300
Interest paid on loan to purchase the
   property                                                         28,000
Loan establishment costs                                    700
Extension to main bedroom                          14,000
Rates paid to local council                               1,500

Required
Consider the above expenditure and advise Kamal what the cost base of the rental property is for CGT purposes.
In your response give reasons and refer to sections of legislation and cases, where relevant

Answer rating: 100% (QA)

Cost base for rental property for GST purposes Item Amount in Reason Purchase pri... View the full answer