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Yes, because relocation costs are generally considered to be capital expenditure incurred for the purposes of enhancing the value of the post-CGT land.

To form part of the cost base, paragraph 160ZH(1)(c) of the Income Tax Assessment Act 1936 requires the following two conditions to be met: (i) the expenditure must enhance the value of the asset; and (ii) the expenditure must be reflected in the state or nature of the asset at the time of disposal.

If both conditions are met, the relocation costs may be included in the cost base of the post-CGT land.

Relocation costs may include costs associated with construction (see TD 93/D79) in addition to such costs as professional fees and other charges.