---
title: "Six Documents You Must Keep After Settlement (One Saves You $50K at Sale)"
description: "The executed contract, settlement statement, building report, title insurance, professional invoices, and depreciation schedule — how each one reduces your CGT when you sell."
author: Joey Don
date: 2025-03-27
category: Investment Strategy
url: https://premiumrea.com.au/blog/six-documents-save-thousands-settlement-tax
tags: ["settlement", "documents", "CGT", "capital gains tax", "cost base", "depreciation", "tax strategy", "property investment"]
---

# Six Documents You Must Keep After Settlement (One Saves You $50K at Sale)

*By Joey Don, Co-Founder & CEO at PremiumRea — 2025-03-27*

> Got the keys? Before you pop the champagne, build a data room. These six documents determine whether you pay $50,000 more tax than you need to when you eventually sell.

I used to work in institutional finance before I became a buyer's agent. One thing that stuck with me from those years: the firms that made the most money weren't always the ones with the best trades. They were the ones with the best record-keeping.

Property investment works the same way. The purchase is the exciting part — the negotiation, the unconditional offer at 9pm on a Tuesday night, the settlement day handshake. But the administrative decisions you make in the week after settlement determine whether you pay $50,000 or $100,000 in capital gains tax when you eventually sell. Not might determine. Will determine.

I'm going to walk through six documents that must be archived the moment you take possession of an investment property. Missing even one of them can cost you five figures in unnecessary tax. The sixth one — the depreciation schedule — is the single most underutilised cash flow tool in Australian property investment.

## Document 1: The executed contract of sale

Not the draft you first signed. The executed version — the one with both signatures, yours and the vendor's.

Why does this matter? Because the contract date — not the settlement date — determines when your ownership period begins for CGT purposes. The ATO calculates the 50% CGT discount eligibility from the contract date [1]. If there's a long settlement period (60-90 days is common in our transactions), you could reach the 12-month holding threshold weeks earlier by counting from contract date rather than settlement.

That might sound trivial, but if you need to sell unexpectedly and you're hovering around the 12-month mark, the difference between contract date and settlement date could be the difference between paying full CGT and paying half. On a $200,000 capital gain at a 37% marginal rate, the 50% discount saves $37,000.

Store the executed contract digitally. I use Google Drive with a dedicated folder per property — what I call a "data room." But whatever system you use, make sure both pages with signatures are captured clearly.

## Document 2: Building and pest inspection report

Most buyers file the building report in their inbox and forget about it. That's a mistake.

The inspection cost (typically $400-$600) forms part of your property's cost base under ATO guidelines [2]. When you eventually sell, your taxable capital gain equals the sale price minus your cost base. Every dollar you can legitimately add to the cost base is a dollar less capital gain you're taxed on.

The building report fee is a capital expense related to acquisition. It's not deductible in the year you pay it — it only becomes useful when you sell. But it does become useful, and forgetting to include it means paying tax on gain that isn't really gain.

Keep the invoice alongside the report itself. Your accountant needs the invoice with the dollar amount, not just the technical report.

## Document 3: The settlement statement

This is the single most important document from your entire purchase. Your conveyancer or solicitor produces it at settlement, and it details every cost that was incurred to complete the transaction.

The big items: stamp duty (approximately 5.5% of the purchase price in Victoria — around $38,000-$44,000 on a $700K-$800K property), council rate adjustments, and water rate adjustments [3].

Stamp duty alone can represent $30,000-$45,000 of your cost base. If you lose the settlement statement and can't prove your stamp duty payment when you sell 10 years later, your accountant has a problem. They can request copies from the State Revenue Office, but it's a hassle that's entirely avoidable.

I tell every client the same thing: treat the settlement statement as your property's birth certificate. It proves what you paid, what taxes you incurred, and what your starting cost base is. Everything else in your tax calculation flows from this document.

> "Your accountant's first question at tax time will be: where's the settlement statement? If you can't produce it within 30 seconds, your filing system needs work." — Joey Don

## Document 4: Title insurance policy

Title insurance costs $700-$1,000 as a one-off payment and covers you for the life of your ownership [4]. It protects against historical title defects, boundary disputes, and — critically for investment properties — unauthorised structures built by previous owners.

If a council inspector discovers that the previous owner's pergola extension was built without a permit, you're liable for remediation. Without title insurance, that remediation might cost $5,000-$15,000 out of pocket. With it, the insurer covers the cost.

The premium itself isn't tax-deductible in the year you pay it, but it forms part of your cost base when you sell — same treatment as stamp duty and building inspection fees [2].

More importantly, title insurance is your risk management tool for the unknown. When you buy a property that's been through multiple owners over 40-50 years (as most of our purchases are), the probability of an undisclosed issue is non-zero. The $800 premium buys peace of mind that could save $15,000.

## Document 5: Professional service invoices

Every professional fee you paid to acquire the property is a capital expense that adds to your cost base. This includes:

- Solicitor/conveyancer fees (typically $1,500-$2,500)
- Buyer's agent fees (our fee is $15,800 + GST)
- Mortgage broker fees (if any were charged directly — most brokers are paid by the lender)

All of these reduce your taxable capital gain when you sell [2]. On a $15,800 buyer's agent fee at a 37% marginal rate with the 50% CGT discount applied, that's a tax saving of approximately $2,920 at the time of sale.

The key detail: these invoices must be retained in their original form with ABN, GST breakdown, and payment date clearly visible. A bank statement showing a payment isn't sufficient — the ATO requires the tax invoice itself.

I've seen investors lose invoices and be unable to claim $20,000 or more in legitimate cost base deductions simply because they cleaned out their email inbox. Digital filing takes 30 seconds per document. The cost of not doing it can be five figures.

> "Every invoice related to your property purchase is cash at the point of sale. Treat them like money, because that's exactly what they are when CGT time comes." — Joey Don

## Document 6: The depreciation schedule (the cash flow accelerator)

This is the document that most investors either don't know about or assume only applies to new properties. Both assumptions are wrong.

A tax depreciation schedule is prepared by a qualified quantity surveyor (QS). It catalogues every depreciable item in your property — from the carpet and curtains to the air conditioning units, the hot water system, and even the building structure itself — and assigns each item an annual depreciation value [5].

There are two types of depreciation:

**Division 40 (plant and equipment):** Items that can be removed — ovens, dishwashers, blinds, carpet, air conditioners. These depreciate at varying rates depending on their effective life. A carpet with an eight-year effective life depreciates at 12.5% per year.

**Division 43 (capital works):** The building structure itself. For properties built after 1987, the construction cost depreciates at 2.5% per year for 40 years. If the house was built in 2000 and the construction cost was $180,000, that's $4,500 per year in deductions for the next 17 years.

Here's the power of this: depreciation is a non-cash deduction. You don't actually spend any money — the ATO allows you to claim the theoretical wear and tear of the building and its contents as a tax loss against your rental income. At a 37% marginal rate, $4,500 in depreciation deductions saves you $1,665 in actual cash tax refund every year [6].

For our typical purchase — a $700K-$800K house with renovations — the QS report usually identifies $3,500-$5,000 per year in combined Division 40 and Division 43 deductions. Over a 10-year hold, that's $35,000-$50,000 in deductions generating $13,000-$18,500 in cash tax refunds.

The QS report costs $600-$800. The return on that investment is 20-to-1.

One caveat: if you buy a property and then do renovations, get two QS reports — one for the existing building (before renovation) and one for the renovation works. The renovation creates a separate Division 43 depreciation pool that you don't want to miss.

I get a depreciation schedule for every single property I own and every property our clients purchase. It's not optional — it's the single most effective legal tool for improving cash flow on a rental property.

## Build your data room today

My system: for every property I manage, I create a Google Drive folder with six subfolders — one for each document category above. Within 48 hours of settlement, every document is scanned and filed.

The total time investment: about 45 minutes. The total cost of not doing it: potentially $50,000+ in avoidable tax over a 10-year hold.

Property investment isn't a hobby. It's a business that happens to involve houses. And like any business, the quality of your record-keeping directly determines the quality of your financial outcomes.

If you settled on a property last year and you haven't ordered a depreciation schedule yet, do it this week. If you can't find your settlement statement, call your conveyancer and request a copy. If you've never heard of title insurance and your property is more than 30 years old, get a quote.

The boring administrative stuff is where the money is. Always has been.

## References

1. [Australian Taxation Office, 'CGT Events — Date of Acquisition', 2023. Contract date determines the start of the ownership period for CGT purposes.](https://www.ato.gov.au/individuals/capital-gains-tax/cgt-events/)
2. [ATO, 'Cost Base of CGT Assets', 2023. Acquisition costs include stamp duty, legal fees, buyer's agent fees, and building inspection costs.](https://www.ato.gov.au/individuals/capital-gains-tax/calculating-your-cgt/cost-base/)
3. [State Revenue Office Victoria, 'Land Transfer Duty Calculator', 2023.](https://www.sro.vic.gov.au/calculators/land-transfer-duty)
4. [First Title Insurance, 'Residential Title Insurance — Coverage and Premiums', 2023.](https://www.firsttitle.com.au/)
5. [ATO, 'Rental Properties — Depreciation of Plant and Equipment (Div 40) and Capital Works (Div 43)', 2023.](https://www.ato.gov.au/individuals/investments-and-assets/residential-rental-properties/rental-expenses-you-can-claim/decline-in-value-of-depreciating-assets/)
6. [BMT Tax Depreciation, 'Average Depreciation Deductions for Established Residential Properties', 2023.](https://www.bmtqs.com.au/)
7. [ATO, 'Record Keeping for Property Investors', 2023. Requirement to retain records for 5 years after disposal of the asset.](https://www.ato.gov.au/individuals/investments-and-assets/residential-rental-properties/record-keeping/)
8. [Property Council of Australia, 'Tax Depreciation Awareness Survey', 2022. Estimated 80% of investment property owners fail to claim full depreciation entitlements.](https://www.propertycouncil.com.au/)

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Source: https://premiumrea.com.au/blog/six-documents-save-thousands-settlement-tax
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent