How Much Is Capital Gains Tax Australia

Capital Gains Tax (CGT) is one of those financial terms that may seem intimidating—but it’s crucial for anyone investing in property, shares, or other assets. Whether you’re selling an investment property or trading stocks, understanding how much Capital Gains Tax is in Australia can save you from unexpected tax bills. Let’s break it down in a simple, easy-to-follow guide.


What Is Capital Gains Tax (CGT)?

Capital Gains Tax is the tax you pay on the profit made from selling a capital asset. In Australia, CGT isn’t a separate tax — it’s part of your income tax. This means any capital gains you make are added to your assessable income and taxed at your marginal tax rate.

Key Points:

  • Applies to assets purchased after 20 September 1985
  • Includes property, shares, cryptocurrencies, and collectibles
  • Losses can offset gains in the same or future years

When Do You Pay Capital Gains Tax?

You pay CGT when you sell an asset and make a profit (also known as a capital gain). It’s triggered by ‘CGT events’ — like transferring ownership, selling, or gifting an asset.

Examples of CGT Events:

Event TypeCGT Applied?
Selling sharesYes
Donating an artworkYes
Gifting propertyYes
Inheriting propertySometimes

How Is Capital Gains Tax Calculated in Australia?

Your capital gain is the difference between what it cost you to acquire the asset (cost base) and what you received when you disposed of it (sale price).

Formula:

Capital Gain = Sale Price – Purchase Price – Eligible Expenses

If you’ve held the asset for more than 12 months, you may be eligible for a 50% CGT discount (for individuals and trusts).

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Current Capital Gains Tax Rates in Australia

CGT is tied to your personal income tax rate, so the rate you’ll pay depends on how much taxable income you earn.

Here’s a quick breakdown based on the 2023–2024 financial year:

Individual Tax Rates

Taxable Income RangeTax Rate for CGT
$0 – $18,2000% (tax-free)
$18,201 – $45,00019%
$45,001 – $120,00032.5%
$120,001 – $180,00037%
$180,001 and above45%

If the asset was held for over 12 months, a 50% discount applies to the gain before it is added to your income.


Are There Any CGT Exemptions?

Yes, not all capital gains are taxable. Some exemptions and concessions include:

  • Main residence exemption
  • Certain personal assets (like cars and furniture)
  • Small business CGT concessions

If you sell your primary home, you generally won’t pay CGT — as long as it’s been your main residence the entire time.

More exemptions and concessional rules can be found directly on the Australian Taxation Office (ATO) website.


Capital Losses and How They Help

If you made a capital loss, you can’t deduct it from your regular income. But you can use it to offset capital gains in the same year or carry it forward to future years.

Example:

If you made a $10,000 capital gain from shares but had a $4,000 capital loss from a failed investment, you only pay tax on $6,000.


CGT for Property Investment

When it comes to real estate, CGT can significantly affect your profits. If you’re not eligible for the main residence exemption:

  • The 50% discount still applies if the property was held for over a year
  • All expenses like stamp duty, legal fees, and renovations can be added to your cost base
  • Selling in a low-income year can reduce how much CGT you pay
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Conclusion

Understanding how Capital Gains Tax works — and how much you could owe in Australia — is essential for investors and property owners alike. Planning ahead and knowing your exemptions can significantly cut down your tax liability. It’s always a wise move to consult a tax professional to ensure you’re not missing out on any concessions or making costly mistakes.

Ready to stay ahead financially? Make CGT part of your overall investment strategy, not just an afterthought at tax time.