How capital gains tax works on Australian property
Capital gains tax (CGT) is not a separate tax. Your capital gain is added to your assessable income for the year you sign the contract of sale, and you pay tax on it at your marginal rate. That means the same gain can cost very different amounts depending on your income and how long you held the property.
The numbers that drive your CGT bill
- Cost base: what you paid plus stamp duty, legal fees, agent commission and capital improvements. A complete cost base is the simplest way to reduce a CGT bill.
- Holding period: individuals who hold an asset for more than 12 months generally qualify for the 50% CGT discount.
- Main residence exemption: a home that was your main residence for the whole ownership period is generally exempt. Partial exemptions apply when it was your home for only part of that time.
- Your marginal rate: the discounted gain is taxed at your rate, so the year you sell matters.
Related property calculators
- ROI calculator: model the full return before you buy.
- Depreciation calculator: depreciation claimed reduces your cost base, so it feeds into CGT.
- Stamp duty calculator: stamp duty forms part of the cost base.
This calculator is provided for general information only and does not constitute financial, tax or legal advice. CGT outcomes depend on your personal circumstances. Always consult a registered tax agent before selling.