How Capital Gains Tax Works in Australia
CGT is not a separate tax — it's the tax on a net capital gain added to your assessable income in the year you sell an asset. It's taxed at your marginal income tax rate.
Capital Gains Tax (CGT) in Australia is not a separate tax — it's a component of your income tax. When you sell an asset for more than you paid for it, the net gain is added to your assessable income for that financial year and taxed at your marginal rate. This calculator applies the 2025–26 income tax brackets to your total income including the capital gain.
The most significant CGT concession available to Australian residents is the 50% CGT discount. If you held the asset for more than 12 months before selling, only 50% of the net gain is included in your assessable income. On a $100,000 gain, this means you only pay tax on $50,000. The discount does not apply to assets held for 12 months or less, which are taxed on the full gain.
Capital losses can be used to reduce capital gains. If you've made losses on other asset sales in the same year, those losses are deducted from your gains before the 50% discount is applied. Unused capital losses can be carried forward to future years indefinitely — they don't expire.
This calculator does not account for the main residence exemption (which may fully or partially exempt your primary home from CGT), small business CGT concessions, or the indexation method available for assets purchased before 21 September 1999. For complex CGT situations, a registered tax agent is essential. For the official ATO guidance, see Capital gains tax on the ATO website.
What is the CGT 50% discount?
If you are an Australian resident and hold an asset for more than 12 months before selling, you only pay tax on 50% of the capital gain. For example, if you made a $200,000 gain, only $100,000 is added to your taxable income. This is one of the most significant tax concessions available to Australian investors.
What is the main residence exemption?
Your main residence (the home you live in) is generally exempt from CGT. If you lived in the property for the entire period you owned it, the full gain is exempt. Partial exemptions apply if you rented it out for part of the time, used it for business purposes, or were absent for extended periods.
What costs can I include in my cost base?
Your cost base includes the original purchase price plus incidental costs: stamp duty, legal fees, agent commissions, and capital improvements (renovations and extensions). Repairs and maintenance costs are not included. For shares, brokerage fees and DRP costs can also be included.
How is CGT taxed in Australia?
CGT is not a separate tax — the taxable capital gain is added to your other income and taxed at your marginal income tax rate for that year. So if your salary is $90,000 and you have a taxable gain of $50,000, your total taxable income is $140,000, and the gain is taxed at 37%.
What happens if I make a capital loss?
Capital losses can only be used to offset capital gains, not regular income. If your losses exceed your gains in a financial year, you can carry the net capital loss forward to future years and use it to offset future gains. Keep records of all capital losses as they have no expiry.