Building on Pre-CGT Land Property acquired before 1985 is not subject to CGT. However where substantial changes are introduced to the buildings on that land or new buildings are erected then the building works itself can be subject to CGT. Example Mohammed Adler bought his investment property in 1984. It is therefore not subject to CGT. Mohammed decides to build a new granny flat out the back of this house, one the same land. The new granny flat will be treated as a separate asset to the land for CGT purposes. Mohammed will get the 50% CGT discount on the house if he sells it more than 12 months after commencing construction. Any gain in the land value will not be taxed. A valuer should be able to apportion the values between the land and the house as of the date sold.