If I sell my property and the purchase price is already greater than the selling price, but I have previously claimed Division 40 and Division 43 deductions in my tax return, should I add back only Division 43 when calculating the capital loss, or should I add back both Division 43 and Division 40?
Yes, because you haven't used the right cost base. Subtracting Div 40 and Div 43 would decrease your cost base = increase in capital gain or less capital loss.
You don't add them back to the loss. You adjust your cost base for depreciation of capital works and capital allowances. The adjusted cost base is then subtracted from the sale price. See example below
CGT when selling your rental property | Australian Taxation Office
Thanks
If I didn't adjust my cost base—meaning I didn't subtract Div 40 and Div 43—and I already have a capital loss, do I still need to adjust my cost base by subtracting Div 40 and Div 43?
You should read cost base of assets. It may help you that you remember Divison 40 and 43 is depreciation.
"Do not include any costs for which you can claim a tax deduction." - it means that if there was depreciation available as a deduction, even if it wouldn't give you tax savings during those tax years, you would need to reduce your cost base.
So cost base should be something like Purchase + other purchase costs + selling cost + cost of improvements & depreciating assets that were not included in the inital purchase - Division 40 - Division 43
If you don't understand, it may be best to see a tax agent.
Thanks
If I didn't adjust my cost base—meaning I didn't subtract Div 40 and Div 43—and I already have a capital loss, do I still need to adjust my cost base by subtracting Div 40 and Div 43?
Yes, because you haven't used the right cost base. Subtracting Div 40 and Div 43 would decrease your cost base = increase in capital gain or less capital loss.
Thanks a lot
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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