Technical Resource Centre

The terms, in plain English

Definitions of the technical terms used across our resources and guides. Definitions describe what a thing is — the current-year figures live in the dated resources that reference them.

Tax & Accounting

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Assessable labour income: Defined in subsection 25-130(4) of the Income Tax Assessment Act 1997 as each amount in your assessable income from which an amount must be withheld under listed PAYG withholding provisions — payments to employees, company directors, office holders and religious practitioners, return-to-work payments, employment termination payments and parental leave pay. It anchors both the standard deduction and the Working Australians tax offset to PAYG withholding categories rather than to a general idea of income from working.
Basic income tax liability: The income tax worked out on your taxable income at the applicable rates, before any tax offsets are applied — the step 2 amount in the method statement in subsection 4-10(3) of the Income Tax Assessment Act 1997. Non-refundable tax offsets are applied against this amount.
Capital gains tax (CGT): Tax on the profit made when you dispose of an asset such as an investment property or shares. The gain forms part of your income tax — CGT is not a separate tax with its own rate. Discounts and exemptions can apply depending on ownership period and use.
Car (tax definition): A motor vehicle (excluding motorcycles and similar vehicles) designed to carry a load of less than one tonne and fewer than 9 passengers including the driver. Electric vehicles, plug-in hybrids and hybrids meeting this definition are cars; only vehicles meeting it can use the cents per kilometre or logbook methods.
Car limit: The maximum cost that can be used to calculate a car's decline in value for tax purposes, indexed by income year. The limit attaches to the car itself rather than an owner's share.
Cents per kilometre method: A method of claiming work-related car expenses by multiplying work-related kilometres by a single per-kilometre rate set by legislative instrument each income year. The rate covers all car costs (including decline in value), no receipts are required, and the claim is subject to an annual per-car kilometre cap.
CGT asset register: An ATO-recognised register into which CGT record details can be transferred. Once an entry in English is certified in writing by an approved person, such as a registered tax agent, the original documents can be discarded five years after certification.
CGT discount: A percentage reduction applied to an eligible capital gain, generally conditional on a minimum ownership period before the CGT event. Availability and the percentage depend on residency and the type of taxpayer, and are set by legislation that can change — current figures live in the dated resources that reference this term.
CGT event: The point at which a capital gain or loss arises for tax purposes. For a property sold under contract, the CGT event generally happens on the contract date, not at settlement — which is why the gain, loss or exemption is reported in the income year the contract is signed.
Cost base: The total of what an asset cost you for CGT purposes. It has five elements, including the purchase price, incidental costs of buying and selling, certain ownership costs, and capital improvements. A higher substantiated cost base means a smaller taxable capital gain.
Cost base indexation: Adjusting elements of an asset's cost base for inflation when working out a capital gain, so that gains attributable purely to inflation are not taxed. Indexation reduces the size of a gain but cannot create or increase a capital loss. Which taxpayers can index, over what period, and on what expenditure, is set by legislation that can change — current rules live in the dated resources that reference this term.
Decline in value: The amount a depreciating asset is treated as losing in value each income year under the uniform capital allowance rules, worked out using the diminishing value method or the prime cost method over the asset's effective life.
Discount capital gain: A capital gain that meets the statutory conditions for a CGT discount percentage to be applied to it, generally including a minimum ownership period before the CGT event. Being a discount capital gain does not by itself tell you the percentage — that depends on the type of taxpayer, residency, the kind of asset and the date of the CGT event.
Dwelling (CGT): For main residence exemption purposes, anything used wholly or mainly for residential accommodation — a house, apartment, strata unit, retirement village unit, or a caravan, houseboat or other mobile home. Vacant land on its own is not a dwelling and cannot attract the exemption.
Home first used to produce income rule: A CGT rule that deems you to have acquired your home at its market value on the day it first started producing assessable income, resetting the cost base where only a partial main residence exemption would apply. It is subject to statutory conditions about when the property was acquired and when it first earned income, and does not apply while the home remains fully exempt under an absence choice.
Input taxed: A GST category for supplies, including residential rent, on which no GST is charged and for which the supplier cannot claim GST credits on related purchases; input-taxed sales are also excluded when working out GST turnover.
Life events test: The narrow test a foreign resident must satisfy to access the CGT main residence exemption for later disposals, based on specified events — a terminal medical condition, the death of a spouse or a child under 18, or a formal relationship-breakdown agreement — occurring within a capped continuous period of foreign residency.
Logbook method: A method of claiming the work-related percentage of actual car expenses — including running costs, loan interest, lease payments and decline in value — worked out from a logbook kept for a continuous period of at least 12 weeks that is representative of the car's travel.
Low income tax offset (LITO): A non-refundable tax offset that reduces tax payable for lower-income Australian resident individuals, tapering to nil as taxable income rises. It cannot generate a refund on its own.
Low-value pool: An optional grouping of lower-cost depreciating assets that are depreciated together as a single pool rather than individually under the uniform capital allowance rules.
Main residence exemption: The CGT exemption that can apply to your home. A dwelling generally qualifies while it is your main residence, and absence rules can extend the exemption after you move out, subject to conditions and time limits when the property earns income.
Marginal tax rate: The rate of tax that applies to the next dollar of taxable income you earn, set by the income bracket that dollar falls into. It is not the rate applied to your whole income — each bracket is taxed at its own rate.
Medicare levy: A levy collected with income tax that helps fund Medicare, calculated as a percentage of taxable income. Low-income earners may pay a reduced levy or none, and a separate Medicare levy surcharge can apply to higher earners without adequate private hospital cover.
Net labour income: The measure that drives the Working Australians tax offset: your labour amounts less your labour deductions for the income year, worked out under subsection 61-155(2) of the Income Tax Assessment Act 1997. It is narrower than total income — rent, dividends, interest and capital gains are not labour amounts.
Non-refundable tax offset: A tax offset that can reduce the tax you owe, but cannot by itself produce a refund. Depending on the offset, any unused amount may be carried forward, transferred, or simply forfeited — the table in subsection 63-10(1) of the Income Tax Assessment Act 1997 sets out what happens to the excess for each offset.
Notice of assessment (NOA): The statement the ATO issues when a tax return is processed, showing the tax owed on taxable income, credit for tax already paid during the income year, and any refund or amount payable. Delivered to the myGov inbox where a myGov account is linked to the ATO, with copies retrievable through ATO online services.
Novated lease: A salary-packaging arrangement under which an employee's car is leased by their employer from a finance company. Because the employee does not own or lease the car themselves, its running costs cannot be claimed under the cents per kilometre or logbook methods, though separate work-related costs such as parking and tolls may remain claimable.
PAYG withholding: Pay-as-you-go withholding — amounts payers withhold from salary, wages and similar payments under ATO withholding schedules and tax tables, credited against the recipient's income tax liability on assessment of their return.
Practical Compliance Guideline (PCG): ATO guidance setting out how the Commissioner will apply compliance resources to an issue — for example, which rental apportionment methods are accepted as fair and reasonable, or which holiday-home deduction behaviours sit in low- and high-risk zones.
Reduced cost base: The version of an asset's cost base used to work out a capital loss. Like the cost base, it excludes amounts that were or could be claimed as tax deductions, and it cannot be indexed.
Seniors and pensioners tax offset (SAPTO): A non-refundable tax offset for eligible seniors and pensioners, with the entitlement shading out as rebate income rises above set thresholds and cutting out entirely at an upper threshold.
Sharing Economy Reporting Regime (SERR): A third-party reporting regime under Subdivision 396-B of Schedule 1 to the Taxation Administration Act 1953 requiring electronic distribution platform operators to report income earned by their suppliers — including short-term accommodation hosts — to the ATO twice a year.
Six-year absence rule: The choice under section 118-145 of the Income Tax Assessment Act 1997 to continue treating a former home as your main residence after you stop living in it — for up to six years per absence while the home is used to produce income, or indefinitely if it is not. Only one dwelling can generally be your main residence at a time.
Standard deduction for work-related expenses: A deduction under section 25-130 of the Income Tax Assessment Act 1997, available from the 2026-27 income year to individuals who derive assessable labour income. It is the lesser of $1,000 and total assessable labour income, reduced (but not below zero) dollar for dollar by the work-related deductions the section lists — so it is a floor beneath those deductions rather than an addition to them, and it is nil once they reach the cap. There is no election: the amount is worked out after the taxpayer's actual deductions.
Substantiation: The Division 900 requirement to keep written evidence for work expenses you claim. From the 2026-27 income year the $300 total work-expenses exception (s 900-35) and the $150 laundry exception (s 900-40) are repealed, so claims above the standard deduction must be fully substantiated under the rules that remain.
Tax-free threshold: The initial portion of a resident individual's annual taxable income on which no income tax is payable. Residents generally claim it from one payer at a time through their tax file number declaration.
Taxable income: Assessable income minus allowable deductions. It is the figure Australian income tax rates are applied to, and the figure many thresholds (such as the Medicare levy and study-loan repayments) are tested against, sometimes with adjustments.
Work-related use percentage: Work-related kilometres travelled during the logbook period divided by total kilometres in that period, multiplied by 100 — the percentage applied to actual car expenses under the logbook method.
Working Australians tax offset (WATO): A non-refundable tax offset for resident individuals whose net labour income exceeds the tax-free threshold, legislated in Subdivision 61-E of the Income Tax Assessment Act 1997.

Business, BAS & Payroll

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Aggregated turnover: The annual turnover of a business combined with the annual turnovers of entities connected with it or affiliated with it, used to test eligibility for small business tax concessions.
Business activity statement (BAS): The form businesses lodge to report and pay GST, PAYG withholding, PAYG instalments and certain other obligations. Lodgement cycles are typically quarterly or monthly depending on turnover and registration choices.
Closely held payee: An individual directly related to the entity that pays them — such as family members of a family business, directors or shareholders of a company, or beneficiaries of a trust. Special STP reporting options and later finalisation deadlines apply.
Current GST turnover: The value of an entity's supplies during a rolling backward-looking 12-month period - the current month plus the previous 11 months. One of the two tests for whether the GST registration threshold has been reached.
Finalisation declaration (STP): The end-of-year declaration an employer makes through Single Touch Payroll confirming it has fully reported for each employee for the financial year. It flips employees’ income statements to “tax ready” and replaces payment summaries for STP-reported amounts.
Fuel tax credit: A credit for the fuel tax (excise or customs duty) included in the price of fuel used in eligible business activities. An entity must be registered for GST before fuel tax credits can be claimed.
General small business pool: The pool under simplified depreciation into which depreciating assets costing at or above the instant asset write-off threshold are allocated, deducted at a set rate in the first year and a higher set rate on the opening pool balance in later years under section 328-190 of the Income Tax Assessment Act 1997.
GST (goods and services tax): A broad-based tax on most goods, services and other items sold or consumed in Australia. Registered entities generally include GST in the prices they charge and claim credits for the GST in the price of goods and services bought for the business.
GST turnover: The turnover measure used to decide whether GST registration is required, based on gross business income (excluding GST) with certain exclusions. Both your current and projected turnover are tested.
Income statement: The ATO’s record of an employee’s year-to-date salary, tax withheld and super, shown in ATO online services through myGov — the STP-era replacement for the paper payment summary.
Input tax credit: The GST credit a registered business can claim for the GST included in the price of business purchases. Claiming credits generally requires a tax invoice and that the purchase relates to making taxable or GST-free sales.
Instant asset write-off: A small-business measure allowing the full cost of eligible depreciating assets under a threshold to be deducted in the year of first use, instead of over several years. The threshold and eligibility depend on what is legislated for the relevant year.
Lock-out rule (simplified depreciation): The rule in subsection 328-175(10) of the Income Tax Assessment Act 1997 that ordinarily prevents a business that stops using simplified depreciation from choosing it again for a set period. Its operation has at times been suspended by transitional provisions.
Low pool value rule: A rule in section 328-210 of the Income Tax Assessment Act 1997 allowing the entire general small business pool balance to be deducted in an income year where the balance falls below the applicable threshold at year end.
Projected GST turnover: The value of supplies made or likely to be made during a rolling forward-looking 12-month period - the current month plus the next 11 months - excluding capital-asset sales and sales made solely because an enterprise is ceasing or substantially and permanently reducing in size. The forward-looking test for GST registration.
Reportable fringe benefits amount (RFBA): The grossed-up value of an employee’s reportable fringe benefits that must be reported through STP or a payment summary when the total taxable value of their benefits exceeds the reporting threshold for the FBT year (1 April to 31 March).
Simpler BAS: The default GST reporting method for smaller businesses, under which only total sales (G1), GST on sales (1A) and GST on purchases (1B) are reported on the activity statement.
Simplified depreciation (Subdivision 328-D): An optional set of depreciation rules for small business entities in Subdivision 328-D of the Income Tax Assessment Act 1997, comprising the instant asset write-off and the general small business pool. The write-off is only available where these rules have been chosen for the relevant years.
Single Touch Payroll (STP): The ATO reporting system that sends employees’ salary, tax and super information from payroll software each pay day. An end-of-year finalisation declaration tells the ATO the year’s figures are complete.
Small business entity: An entity that carries on a business and whose aggregated turnover is below the statutory limit in section 328-110 of the Income Tax Assessment Act 1997, tested on the previous year's turnover or the likely current-year turnover.
Stapled super fund: An existing super fund linked to an employee that follows them between jobs, used when a new employee does not choose a fund; employers request stapled fund details from the ATO.
Super guarantee (SG): The minimum superannuation an employer must pay for eligible employees, calculated as a legislated percentage of ordinary time earnings and paid at least quarterly to a complying fund by the due dates.
Super guarantee charge (SGC): The charge an employer becomes liable for when super guarantee is not paid in full and on time. It includes the shortfall, interest and an administration fee, and unlike ordinary super contributions it is not tax deductible.
Tax invoice: A supplier document showing the GST included in a sale's price, required to substantiate GST credit claims on purchases above the ATO's tax invoice threshold.
Taxi travel (GST): Transporting passengers by taxi or limousine for fares, which for GST purposes includes ride-sourcing. Providers must register for GST regardless of turnover, before their first trip.
Update event (STP): An STP submission used to correct or update previously reported year-to-date employee information outside a regular pay run, including after a finalisation declaration has been made.
Voluntary GST registration: GST registration chosen by an entity whose turnover is below the registration threshold - bringing the right to claim GST credits alongside the obligation to charge GST and lodge activity statements, generally with a minimum registration period.

Mortgage & Lending

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'Not unsuitable' assessment: The assessment a credit licensee must make under Chapter 3 of the National Consumer Credit Protection Act 2009 before providing or assisting with a consumer credit contract, based on reasonable inquiries about, and verification of, the consumer's financial situation. Consumers can request a written copy.
ADI (authorised deposit-taking institution): A bank, building society or credit union authorised by APRA to accept deposits. APRA's prudential lending standards, including the serviceability buffer, apply to ADIs.
Annual percentage rate (advertised interest rate): The interest rate on the loan itself, before fees and charges are taken into account. When a credit advertisement states this rate, the National Credit Code requires the comparison rate to appear as well.
Australian Government 5% Deposit Scheme: The renamed and expanded Home Guarantee Scheme, under which Housing Australia guarantees part of an eligible first home buyer's loan to a participating lender so the purchase can proceed with a smaller deposit and without lenders mortgage insurance. The guarantee protects the lender, not the borrower.
Break cost: A fee a lender may charge for ending or changing a fixed-rate loan period early — for example by repaying, refinancing or switching during the fixed term. It reflects the lender’s wholesale funding loss and can be substantial.
Capitalising LMI: Adding the lenders mortgage insurance premium to the loan balance instead of paying it at settlement, so the premium is repaid — with interest — over the life of the loan.
Cash rate target: The Reserve Bank of Australia's operational interest rate target, set by its Monetary Policy Board, which meets eight times a year. Changes flow through to home loan rates but are not their only driver.
Comparison rate: A legally required rate that combines a loan’s interest rate with certain fees into a single figure, calculated on a standardised loan example so products can be compared. It excludes some costs and may not reflect your actual loan size or term.
Continuing credit contract: An ongoing revolving credit facility, such as a credit card. Advertising for credit under these contracts is not required to carry a comparison rate under Part 10 of the National Credit Code.
Credit fees and charges: Fees and charges payable to a credit provider in connection with a loan. Those that are ascertainable when a comparison rate is disclosed — other than government fees, charges or duties — are built into the comparison rate; fees whose imposition or amount depends on events that may or may not happen are not.
Credit report: A record of your credit history held by a credit reporting body, including credit products held, repayment history, financial hardship information, defaults, past credit applications and any bankruptcy or debt agreements. Credit providers and lenders mortgage insurers may access it when assessing a credit application, and consumers have a legal right to obtain their own copy at regular intervals at no cost.
Debt-to-income (DTI) ratio: A borrower's total debt divided by gross income, used by lenders and regulators as an indicator of leverage in mortgage lending and, at portfolio level, as a macroprudential policy tool.
Designated amounts and terms: The standardised loan amounts and terms prescribed by regulation 97 of the NCCP Regulations 2010. An advertised comparison rate is calculated on whichever designated example most closely represents the typical amount of credit and term for the advertised product, so that products can be compared like-for-like.
First Home Super Saver Scheme (FHSSS): A scheme that lets eligible first home buyers make voluntary superannuation contributions and later withdraw them, plus associated earnings, towards a first home deposit.
Fixed interest rate: An interest rate that stays the same for a set period. When the fixed period ends, the loan typically moves to a variable rate, or another fixed term can be negotiated with the lender.
Genuine savings: A lender-specific policy term for deposit funds a borrower has accumulated or held over time, as distinct from gifts or windfalls. Definitions and thresholds vary between lenders and mortgage insurers; there is no single government-set standard.
Guarantor: A person, often a family member, who agrees to repay a borrower's loan if the borrower cannot — potentially the whole amount including interest, fees and charges — and who may offer their own home or savings as security. Lenders mortgage insurance does not protect the guarantor.
HELP debt: Higher Education Loan Program debt (commonly called HECS). Compulsory repayments are deducted from income before it can service a mortgage, so lenders consider HELP obligations alongside other debt commitments in serviceability.
Help to Buy: An Australian Government shared equity scheme in which the government contributes a share of the purchase price of an eligible home in return for an equity interest, reducing the amount the buyer needs to borrow.
Household Expenditure Measure (HEM): A benchmark of typical household living expenses that many lenders use as a floor when assessing loan applications — if your declared expenses are lower than the benchmark, the lender generally assesses you at the benchmark instead.
Income shading: The practice of discounting less certain income — such as overtime, bonuses, commission, and rental or investment income — when calculating serviceability. Shading percentages are set by each lender's credit policy.
Interest rate floor: A minimum assessment interest rate a lender uses together with the serviceability buffer, so repayment capacity is still tested prudently when market rates are low. Each lender sets its own floor rate.
Key Facts Sheet (KFS): A standardised disclosure document for standard home loans under the National Consumer Credit Protection Act, showing personalised figures including a personalised comparison rate, the total amount to be repaid, and establishment and ongoing fees.
Lenders mortgage insurance (LMI): Insurance that protects the lender (not the borrower) if the borrower defaults and the property sale doesn’t cover the debt. It is typically required for higher-LVR lending and the premium is usually paid by the borrower.
Loan-to-value ratio (LVR): The loan amount as a percentage of the lender’s valuation of the security property. LVR drives pricing tiers, deposit requirements and whether lenders mortgage insurance typically applies.
Offset account: A transaction account linked to a home loan whose balance is subtracted from the loan balance before interest is calculated each day. Funds in offset do not earn interest; offsets may be full or partial, and account or package fees may apply. Generally available with variable rate loans.
Personalised comparison rate: The comparison rate shown in a Key Facts Sheet for a standard home loan, calculated under the same legislated formula as an advertised comparison rate but on the consumer's own loan amount and term rather than the standardised advertising example.
Pre-approval: A lender's conditional indication that a borrower may be eligible for a loan up to a stated amount, subject to full assessment. It is time-limited and does not commit the borrower or the lender to proceeding.
Preliminary assessment: The assessment a credit assistance provider (such as a mortgage broker) must make under the National Consumer Credit Protection Act 2009 that a proposed credit contract is 'not unsuitable' for the consumer. The consumer can request a written copy; a credit provider's equivalent is the final assessment.
Redraw facility: A loan feature that lets a borrower withdraw extra repayments previously made directly onto the loan. How and when the funds can be accessed depends on the loan's terms.
Responsible lending obligations: The conduct obligations in Chapter 3 of the National Consumer Credit Protection Act 2009 requiring credit licensees to make reasonable inquiries about a consumer's requirements, objectives and financial situation, take reasonable steps to verify that financial situation, and assess that the credit is not unsuitable before it is provided or suggested.
Serviceability: A lender’s assessment of whether you can afford a loan’s repayments alongside your existing commitments and living expenses. Each lender applies its own policy, buffers and expense benchmarks to reach its own answer.
Serviceability buffer: The margin a lender adds to the actual interest rate when testing whether you could still afford repayments if rates rose. Banking regulation sets an expected minimum buffer for authorised deposit-taking institutions.
Split loan (partially-fixed rate): A loan in which a portion of the balance has a fixed rate and the rest a variable rate, in proportions the borrower chooses (for example 50/50 or 20/80), giving partial repayment certainty while typically retaining variable-side flexibility.
Variable interest rate: An interest rate that can move up or down as the lending market changes — for example when the official cash rate changes — with repayments changing accordingly. The cash rate is not the only driver: creditworthiness, customer value and lender competition also affect the rate charged.

Property Investors

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Apportionment: Splitting an expense between its deductible income-producing portion and its non-deductible private portion — for short-term rentals usually on a time basis (days rented), an area basis (floor area guests can use, including a share of common areas), or both together.
Capital works deduction (Division 43): The deduction for the structural construction cost of an income-producing building and certain improvements, generally claimed at a set percentage per year over decades rather than immediately.
Clearance certificate (FRCGW): An ATO certificate confirming a property vendor is an Australian resident for tax purposes, given to the purchaser at or before settlement. Without it, the purchaser must withhold part of the sale proceeds under the foreign resident capital gains withholding rules.
Depreciating asset (Division 40): An item with a limited effective life that declines in value, such as appliances or carpets in a rental property. Its cost is deducted over its effective life, with different rules from the building’s structural capital works.
Entirety: Something separately identifiable as a principal item of capital equipment, such as an entire fence, an entire toilet or complete kitchen cupboards. Replacing an entirety is reconstruction rather than repair and is treated as capital (TR 97/23, applying Lindsay v FC of T).
Fixed trust: A trust in which beneficiaries are presently entitled to the trust's income and capital. Unlike a special trust, a fixed trust is eligible for the NSW land tax threshold.
Improvement: Work that makes part of a property better, more valuable or more desirable, or changes the character of the item worked on — providing something new or going beyond restoring efficient function. Claimed as capital works or as a depreciating asset, not as a repair.
Improvement (rental property): Work that makes part of a property better, more valuable or more desirable, or changes the character of the item worked on — providing something new or going beyond restoring efficient function. Claimed as capital works or as a depreciating asset, not as an immediately deductible repair.
Improvement threshold: An annually indexed amount used, together with a percentage-of-proceeds test, to decide whether a major capital improvement to a property acquired before 20 September 1985 is treated as a separate CGT asset.
Initial repair: Work that remedies defects, damage or deterioration that existed when you acquired a property. Initial repairs are treated as capital — they are not immediately deductible as repairs, even if the same work later in ownership would be.
Land tax: An annual state tax on the unimproved value of taxable land you own above a threshold, assessed on your holdings at a set date each year. Exemptions commonly apply to a principal place of residence and some land uses.
Leisure facility: Land, buildings or structures used or held for holidays or recreation — including holiday homes. Under section 26-50 of the ITAA 1997, deductions for ownership and use costs of a leisure facility are denied unless an exception applies, most relevantly where the property is used or held for use mainly to produce rental income.
Maintenance: Work that prevents deterioration or fixes deterioration that has already occurred, keeping a rental property in a tenantable condition — such as repainting faded walls or maintaining plumbing. Deductible in the year incurred.
Maintenance (rental property): Work that prevents deterioration, or fixes deterioration that has already occurred, keeping a rental property in a tenantable condition — for example repainting faded walls or oiling a deck. Deductible in the income year it is incurred.
Negative gearing: Holding an income-producing asset — most commonly a residential rental property — where the deductible costs of holding it exceed the income it produces, so the investment runs at a loss for tax purposes. How that loss may be used depends on the law in force for the relevant income year.
Premium threshold: The taxable land value at which NSW land tax moves from the standard marginal rate to the higher premium marginal rate, as set by Revenue NSW for each land tax year.
Principal place of residence (PPR) exemption: The NSW land tax exemption for a home a natural person uses and occupies as their principal place of residence — one exemption per family, generally unavailable to companies and special trusts, and subject to minimum ownership requirements for the occupying owners.
Quantity surveyor report: An estimate of a building's construction costs, often accompanied by a schedule of depreciating assets, prepared by a quantity surveyor or other qualified person independent of the owner, used where actual construction costs cannot be determined. The fee for obtaining it is deductible in the year paid.
Quarantined amount: An amount of residential-property deductions that section 26-155 of the Income Tax Assessment Act 1997 prevents being deducted for an income year, because those deductions exceed the taxpayer's assessable income from using or holding residential dwellings as residential accommodation. It may be applied in the section 102-5 net capital gain method statement against residential capital gains, and any part that remains carries forward to the next income year rather than being lost.
Repair: Work that remedies defects, damage or deterioration of a rental property arising from wear and tear or damage that occurred while the property was rented, restoring the item's efficient function without changing its character. Deductible in the year incurred under s 25-10 ITAA 1997.
Repair (rental property): Work that remedies defects, damage or deterioration arising from wear and tear or damage that occurred while a property was rented, restoring the item's efficient function without changing its character. Deductible in the year incurred under section 25-10 of the ITAA 1997.
Residential capital gain: A capital gain relating to a CGT asset that is, or was, a residential dwelling — apportioned by residential-accommodation days over the relevant ownership period — as defined for the purposes of the net capital gain method statement in section 102-5 of the Income Tax Assessment Act 1997. Quarantined amounts can be applied only against residential capital gains and deferred residential capital gains, and are applied before the CGT discount step.
Residential dwelling (section 26-160): The statutory term that fixes the scope of the residential-property deduction quarantining rule. It means a dwelling other than a caravan, mobile tiny home or other mobile home; a hotel, motel, inn, hostel or boarding house; a dwelling providing accommodation to students in connection with a school or another education institution; or a boat or other marine vessel. It extends to adjacent land and to a garage, storeroom or other associated structure available for use by an occupant.
Special trust: A trust classification for NSW land tax — typically including discretionary family trusts — where the trustee is assessed without the benefit of the tax-free threshold, paying the standard rate from the first dollar of taxable land value.
Surcharge land tax: An additional NSW land tax charged to foreign persons on the taxable value of residential land they own at the taxing date. It has no tax-free threshold and is payable on top of any ordinary land tax.
Taxing date: Midnight on 31 December each year — the point at which NSW land ownership is assessed for the following land tax year. Tax is charged for the full year that follows and is not apportioned for part-year ownership.
Unimproved land value: The value of the land itself, excluding buildings and other improvements, determined by the NSW Valuer General as at 1 July each year. Revenue NSW averages these values over three years to calculate land tax.

SMSF & Superannuation

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Acquirable asset: The class of asset a superannuation fund may borrow to acquire under the limited recourse borrowing exception, defined in section 67A(2) of the Superannuation Industry (Supervision) Act 1993. An asset qualifies if it is not money and no law prohibits the trustee from acquiring it — and, for arrangements to which the 2026 amendment applies, where the asset is real property it must also be business real property. If an asset is not an acquirable asset, the borrowing exception is unavailable.
Approved SMSF auditor: An auditor registered with ASIC to audit self-managed superannuation funds. The auditor examines the fund's financial statements and its compliance with superannuation law each year, and the SMSF annual return cannot be finalised until this audit is complete.
ATO supervisory levy: An annual levy self-managed super funds pay to the ATO as regulator, collected with the SMSF annual return. The amount is set by regulation and can change, so the current figure should be confirmed at lodgement.
Bring-forward arrangement: A rule allowing an eligible person to bring forward up to two future years of non-concessional contributions cap, permitting larger after-tax contributions within a two- or three-year period. Availability and the size of the arrangement depend on age and on total superannuation balance at the previous 30 June, and the cap is fixed at the amount applying in the first year of the period.
Business real property: A defined term in section 66(5) of the Superannuation Industry (Supervision) Act 1993, covering a freehold or leasehold interest (and certain assignable or transferable Crown land interests) in real property used wholly and exclusively in one or more businesses — whether or not the business is carried on by the entity holding the interest. It excludes an interest held in the capacity of beneficiary of a trust estate. It is not a synonym for "commercial property": it turns on actual business use rather than zoning or a label, and characterisation is fact-specific.
Carry-forward concessional contributions: The ability to use unused concessional cap amounts from previous years (within a legislated look-back window) if your total superannuation balance is under the qualifying threshold — allowing a larger concessional contribution in one year.
CGT cap amount: A lifetime superannuation cap allowing eligible proceeds from the small business CGT concessions to be contributed to super without counting towards the non-concessional contributions cap. The amount is indexed periodically.
Commutation: Exchanging part or all of a superannuation income stream for a lump sum, which can be cashed out of super or moved back to accumulation phase. Commutations create debits in the transfer balance account; regular pension payments do not.
Concessional contribution: A superannuation contribution made from pre-tax money — such as employer super guarantee, salary sacrifice, or personal contributions you claim a deduction for — taxed in the fund and limited by an annual cap.
Deferred debt account: An ATO account holding Division 293 tax attributed to a defined benefit interest. Payment is deferred until an end benefit is paid from that interest, with end-of-year interest accruing on unpaid balances at the average 10-year Treasury bond rate.
Defined benefit income cap: An annual cap on concessionally taxed income from capped defined benefit income streams for recipients 60 or over. Income above the cap can be partly included in assessable income. The cap is indexed and published by the ATO each year.
Division 293 income: The income measure used for Division 293 tax, based on the income calculation for the Medicare levy surcharge (disregarding reportable super contributions): taxable income plus reportable fringe benefits amounts, net financial investment loss, net rental property loss and family trust distribution tax amounts, less certain super lump sum and First Home Super Saver amounts.
Division 293 tax: An additional tax on concessional superannuation contributions that applies when your combined income and contributions exceed a legislated threshold. It reduces the tax concession higher earners receive on super contributions.
Division 296: The additional tax on superannuation earnings attributable to the part of a member’s total superannuation balance above a legislated threshold. Its rates, thresholds and commencement are set by legislation — see the dated resource for the current position.
End benefit: The superannuation benefit whose payment from a defined benefit interest triggers payment of a deferred Division 293 debt. Successor-fund rollovers on merger, severe financial hardship payments, compassionate grounds releases and family law super payments are not end benefits.
Excess transfer balance: The amount by which a person's transfer balance exceeds their personal transfer balance cap, plus notional earnings that compound daily. It must generally be commuted out of retirement phase, and excess transfer balance tax applies to the notional earnings.
Limited recourse borrowing arrangement (LRBA): The only borrowing structure generally permitted for an SMSF to acquire an asset: the loan is secured only against the acquired asset held in a separate trust, so the lender’s recourse to other fund assets is limited.
Minimum pension payment: The minimum amount that must be paid from an account-based pension each financial year, worked out from the member's age and account balance, for the pension to keep its retirement-phase tax treatment. The payment must actually leave the fund by year end.
Non-concessional contribution: A superannuation contribution made from after-tax money, not taxed again in the fund, limited by its own annual cap and eligibility rules tied to your total superannuation balance.
Personal transfer balance cap: An individual's own lifetime limit on transfers into retirement phase. It is set equal to the general transfer balance cap when the person first starts a retirement-phase income stream and afterwards increases only by proportional indexation, so it can differ from the current general cap.
Proportional indexation: The method by which personal transfer balance caps rise when the general cap is indexed: the personal cap increases by the person's unused cap percentage (based on the highest-ever balance of their transfer balance account) multiplied by the indexation increment. No increase applies if the highest-ever balance reached or exceeded the personal cap.
Release authority: An ATO instruction to a super fund to pay an amount from a member's super directly to the ATO — used, for example, when a person elects to pay a Division 293 liability from super. The election must be made within the statutory window after the assessment and cannot be withdrawn or reversed.
Retirement phase: The superannuation phase in which a pension is being paid and investment earnings on assets supporting it are generally tax-exempt, subject to the transfer balance cap and minimum annual pension payments.
Self-managed superannuation fund (SMSF): A private superannuation fund regulated by the ATO in which the members are generally also the trustees (or directors of a corporate trustee) and are personally responsible for the fund complying with superannuation and tax law.
SMSF annual return (SAR): The combined return an SMSF lodges with the ATO each year, covering the fund's income tax reporting, regulatory information and member reporting. It is distinct from an ordinary company or trust tax return and can only be lodged after the fund's audit is complete.
SMSF investment strategy: The documented plan setting out how an SMSF invests to meet its members' retirement objectives, having regard to matters such as risk, diversification, liquidity, the fund's ability to pay benefits, and members' insurance needs. Trustees are required to review it regularly and give effect to it.
SMSF supervisory levy: The annual levy an SMSF pays to the ATO, collected with the SMSF annual return, that funds the ATO's regulation of the SMSF sector.
Sole purpose test: The requirement in section 62 of the Superannuation Industry (Supervision) Act 1993 that a regulated superannuation fund be maintained solely for providing retirement benefits to members, or benefits to their dependants on a member's death. Every trustee decision, including how fund assets are used, must be consistent with it — a fund asset providing a present-day benefit to a member or related party puts the test at risk.
Special value: The modified amount at which a capped defined benefit income stream is counted towards the transfer balance cap — a statutory multiple of the annualised entitlement for lifetime products (16 times), or the annual entitlement multiplied by the remaining term (rounded up) for life-expectancy and market-linked products. Calculated and reported by the fund.
Taxable super contributions: The amount actually taxed under Division 293: the lesser of a person's Division 293 super contributions and the amount by which their combined income and contributions exceed the Division 293 threshold.
Total superannuation balance (TSB): The measure of everything you hold in the super system at 30 June each year. Several rules test your TSB, including non-concessional contribution eligibility and carry-forward concessional rules.
Transfer balance account: The ATO-maintained ledger of credits (amounts moved into retirement phase) and debits (mainly commutations) that measures a person's position against their personal transfer balance cap. Each person has one account for life across all funds, starting when they first receive a retirement-phase income stream.
Transfer balance account report (TBAR): The report an SMSF lodges to tell the ATO about events that affect a member’s transfer balance account, such as starting or commuting a retirement-phase pension, within the required reporting timeframe.
Transfer balance cap (TBC): The lifetime limit on the amount that can be moved into tax-free retirement-phase pensions. Your personal cap may differ from the general cap because indexation applies proportionally to unused cap space.

Regulatory & Practice Updates

Resources →

AFCA: The Australian Financial Complaints Authority — the free external dispute resolution scheme for complaints about financial firms, including credit assistance providers. Membership is compulsory for licensees and authorised representatives.
Australian Credit Licence (ACL): The licence ASIC issues to entities that engage in credit activities, such as providing credit assistance for home loans. Licensees must meet conduct, competence and dispute-resolution obligations, and may authorise credit representatives to act under their licence.
Best interests duty: The legal duty requiring mortgage brokers to act in the best interests of the consumer when providing credit assistance, and to prioritise the consumer’s interests where a conflict arises. Lenders dealing directly with borrowers do not owe this duty.
Commencement vs application: Two different dates in an Act. Commencement is when the amendments enter the statute book. Application is when they first affect a taxpayer — often a later date written into the provisions themselves, keyed to an income year, an assessment, or the date of a particular event. A measure can be fully commenced law and still change nothing for you yet.
Credit Guide: The disclosure document a credit assistance provider must give you, setting out who they are, their licensing arrangement, how they are paid, their dispute resolution process and other information required by credit law.
Credit representative: A person authorised to provide credit assistance under another entity’s Australian Credit Licence rather than holding their own licence. The licensee is responsible for the representative’s conduct, and the arrangement must be disclosed in the Credit Guide.
Enacted vs announced measures: An enacted measure has passed both Houses of Parliament and received royal assent, making it law. An announced or introduced measure — such as a Budget announcement or a bill before Parliament — is not law and may change, be amended, or fail to pass.
General interest charge (GIC): Interest the ATO applies to unpaid tax debts, compounding daily at a rate updated quarterly. Its tax treatment and current rate depend on the law and determinations in force for the relevant period.
Legislative instrument: Subordinate law made by a Minister or other authority under a power given by an Act, and registered on the Federal Register of Legislation. Where an Act leaves a key definition or method to an instrument, that part of the Act cannot operate in practice until the instrument is made — so an enacted measure can still have components that are not yet capable of applying.
National Credit Code (NCC): Schedule 1 to the National Consumer Credit Protection Act 2009 — the Commonwealth law governing consumer credit contracts, including the rules that mandate comparison rates in credit advertising.
Registered BAS agent: A person or entity registered with the Tax Practitioners Board to provide BAS services — such as preparing and lodging activity statements — for a fee. Registration carries qualification, experience and conduct obligations parallel to those of a registered tax agent, but is limited to BAS services rather than the full range of tax agent services.
Registered tax agent: A person or entity registered with the Tax Practitioners Board to provide tax agent services for a fee. Registration requires qualifications, experience, fitness and propriety, and ongoing obligations under the Code of Professional Conduct.
TPB Register: The Tax Practitioners Board’s public register of registered tax agents and BAS agents. Anyone can search it to confirm a practitioner’s registration number, status and any conditions or sanctions.

These definitions are general information only, simplified for readability. The legislation and official guidance prevail. For how a term applies to your circumstances, talk to the practice.