Jamie purchased land in 2012 for $150,000. He then constructed a house on that property for $250,000. During the period of time it took to complete the building of the house, Jamie paid $18,000 in interest to the bank on a loan for the property and council rates and land tax of $1,200 in total. These costs were incurred in the year before Jamie started receiving any rent on the property. After construction of the house and before the property was rented, what is Jamie's cost base in this property?

Question

Quizplus · Accepted Answer

Jamie's cost base includes the initial land purchase ($150,000), construction costs ($250,000), interest on the loan ($18,000), and council rates and land tax ($1,200), totaling $419,200.

Jamie Purchased Land in 2012 for $150,000