Private ruling: Pre-CGT status
Date of advice: 21 November 2025
Published: 12 January 2026
Ruling period: 30 June 20XX
Date scheme commenced: XX XXX 19XX

Ruling: Q1: Does the property maintain its Pre-CGT status after the strata title was established on XX XXX 20XX under subsection 112-25(2) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Strata or subdivision of the land also does not alter its pre-CGT status, if you retain ownership of strata or subdivided blocks. At the time of subdivision and strata titling there was no change in ownership, so your ownership interest in property retains its pre-CGT status under subsection 112-25(2) of the ITAA 1997.

Relevant facts and circumstances: You acquired a residential block on DD MM 19YY for $XXX,000. The property when purchased included X units. You have provided a copy of the purchase contract dated the DD MM 19YY. The property was purchased under a single title, prior to the introduction of Capital Gains Tax (CGT) in Australia on XX XXX 19XX. The units were converted to strata title on DD MM 20YY under strata title with the Council . The strata title established the following: • Separate titles were created for each of the X existing units • Separate water meters were installed for each unit. There were no major renovations conducted when the units were spilt and the physical structure remained unchanged. You were the sole owner of the original block when it was purchased and remained the XXX% owner of all of the X subsequent unit blocks after the strata title was established. You have a provided recent land titles searches dated DD MM 20YY for all X units showing you are the owner of each of the individual units. You stated the units were placed on separate titles to make the administration easier. No new rights were received for the units that did not exist on DD MM 19YY. No major renovations have been undertaken since the purchase on DD MM 19YY. All units are XXX% rented to third parties at market rates for the entire period of ownership.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 108-55(2) | Income Tax Assessment Act 1997 section 112-10 | Income Tax Assessment Act 1997 Division 128

Reasons for decision: Summary: Yes. | Detailed Reasoning - Capital gains tax: The capital gains tax (CGT) provisions are contained in Parts 3-1 and 3-3 of the ITAA 1997. Broadly, the provisions include in your assessable income any assessable gain or loss made when a CGT event happens to a CGT asset that you own. The most common CGT event, being CGT event A1, happens if you dispose of your ownership interest in a CGT asset under section 104-10 of the ITAA 1997. A CGT asset is a kind of property or legal or equitable right that is not property under subsection 108-5(1) of the ITAA 1997, which also includes a part of, or an interest in an asset as outlined in subsection 108-5(3) of the ITAA 1997. However, any capital gain made on the disposal of a pre-CGT asset can be disregarded. A pre-CGT asset is an asset that is acquired prior to 20 September 1985 under section 149-10 of the ITAA 1997. | Detailed Reasoning - Building or structure on land acquired pre-CGT: Under subsection 108-55(2) of the ITAA 1997, a building or structure constructed on land that the taxpayer acquired before 20 September 1985 is taken to be a separate CGT asset from the land: (a) if the taxpayer entered into a contract for the construction on or after that day, or (b) where there is no contract - if the construction started on or after that day. When a CGT event happens to the real property, that CGT event happens to each separate asset and a separate capital gain or loss calculation is necessary for each CGT asset. The buildings were present and completed prior to 20 September 1985 when you purchased the property, so both the buildings and land represent a pre-CGT asset. | Detailed Reasoning - Subdivision of land: When a CGT asset (the original asset) is split into two or more assets (the new assets), such as when land is subdivided, the subdivision of the land into subdivided lots is not a CGT event under subsection 112-25(2) of the ITAA 1997. Each of the new assets will be viewed as having been acquired on the same date as the original asset for CGT purposes. If pre-CGT land is subdivided after 19 September 1985, the land of the subdivided lots maintains their pre-CGT status as there is no CGT event in accordance with Taxation Determination TD 7 Capital Gains: What are the CGT consequences of sub-dividing pre-CGT land? | Detailed Reasoning - Application to your circumstances: You have stated that no major improvements have been done to the property since its initial purchase on the XX XXX 19XX. Formation of a strata title arrangement (82400) occurred on XX XXX 20XX. The strata title established the following: • Separate titles were created for each of the X existing units • Separate water meters were installed for each unit. No other major development changes have made to the property since it was purchased as a pre-CGT Asset on XX XXX 20XX. A recent certificate of title search done on XX XXX 20XX confirm you remain the 100% owner of the property and the individual units both jointly and severally both before and after 20 September 1985 and subsequent to the strata title been established XX XXX 20XX. The units have been to date used as investment property rented to third parties. Strata or subdivision of the land also does not alter its pre-CGT status, if you retain ownership of strata or subdivided blocks. At the time of subdivision and strata titling there was no change in ownership, so your ownership interest in property retains its pre-CGT status under subsection 112-25(2) of the ITAA 1997.