The historic cost of freehold land shall be computed by adding to the value of such land compound interest at the rate of 5% for each completed year from the date of acquisition to the date of sale or disposition. The value shall be the value of the land at the time of acquisition by the seller including legal and survey costs in respect thereof, together with the cost of additional buildings and improvements, from the date such buildings and improvements are constructed and effected, respectively, but shall exclude any deductions made in respect of such additional buildings and improvements under the Income Tax Act 2015.

The historic cost of an option to purchase or to take an estate or interest in freehold land shall be the consideration for the option.