Capital Gains Tax Calculator Australia 2026

How Capital Gains Tax Works on Australian Property

When you sell a property in Australia for more than your total cost base, the profit is classified as a capital gain. Capital gains tax is not a separate tax — your taxable capital gain is added to your assessable income for the financial year and taxed at your marginal tax rate. The Australian Taxation Office (ATO) requires you to report all capital gains and capital losses in your income tax return for the year the sale contract is signed. Understanding how capital gains tax applies is essential for any income tax calculation involving property.

Capital gains tax applies to any asset acquired after 20 September 1985, including residential and commercial property, shares, and other investments. Your principal place of residence is generally exempt from capital gains tax, but all other properties are subject to capital gains tax when sold at a profit. Use the capital gains tax calculator above to estimate your taxable capital gain and the capital gains tax payable on your property sale.

How to Calculate Capital Gains Tax on Property

To calculate capital gains tax on a property sale, follow these steps. This capital gains tax calculation method applies to all Australian property sales:

Step 1: Determine Your Cost Base

Add the purchase price, stamp duty, legal fees, and any capital improvements made during ownership.

Step 2: Calculate Your Capital Proceeds

The sale price minus selling costs such as agent commissions, marketing, and legal fees.

Step 3: Calculate the Capital Gain

Subtract the cost base from your capital proceeds. This is your gross capital gain before any discounts.

Step 4: Apply the 50% CGT Discount

If you held the property for more than 12 months, your taxable capital gain is only half the gross capital gain.

Step 5: Add to Your Other Income

The taxable capital gain is added to your salary, rental income, and other earnings for the year as part of your income tax calculation.

Step 6: Calculate CGT Payable

The total is taxed at your marginal tax rate. The capital gains tax you owe is the difference between tax on your total income and tax on your income without the capital gain.

Understanding the Cost Base for Capital Gains Tax

The cost base is the most important factor in your capital gains tax calculation. A higher cost base means a lower capital gain and less capital gains tax to pay. The ATO allows you to include five elements in your cost base when calculating capital gains tax:

Element 1: Acquisition Costs

The purchase price of the property, stamp duty, legal and conveyancing fees, and search fees.

Element 2: Incidental Costs

Costs of buying and selling, including valuation fees, surveyor costs, and transfer fees.

Element 3: Ownership Costs

Only claimable for properties acquired before 21 August 1991 where costs were not deductible elsewhere.

Element 4: Capital Improvements

Renovations, extensions, structural additions, and other works that increase the property's value. Note that capital works deductions (Division 43) for building construction costs are treated differently — capital works deductions reduce the cost base, so you cannot claim them twice.

Element 5: Costs of Preserving Title

Legal costs to establish or protect your ownership of the CGT asset.

Keeping accurate records of all costs from the purchase price onwards is essential for minimising capital gains tax. PropBoss automatically tracks your purchase price, purchase costs, capital improvements, and ownership expenses so your cost base is always up to date when you need to calculate capital gains tax. The higher your cost base above the original purchase price, the lower your taxable capital gain.

The 50% CGT Discount Explained

Australian individual taxpayers and trusts are eligible for a 50% discount on capital gains when they hold an asset for at least 12 months before selling. This discount means you only pay tax on half of the capital gain, which can significantly reduce the amount of CGT payable.

The 12-month holding period is measured from the date of the purchase contract to the date of the sale contract — not the settlement dates. If you sell even one day before the 12-month mark, you lose the entire discount.

Companies are not eligible for the 50% CGT discount. They pay tax on the full capital gain at the company tax rate of 25% for base rate entities. Self-managed super funds (SMSFs) receive a reduced discount of one-third, meaning they pay tax on two-thirds of the gain at the concessional super rate of 15%.

2025–26 Tax Rates for Capital Gains

Capital gains are taxed at your marginal tax rate. The 2025–26 individual tax brackets (following the Stage 3 tax cuts) are:

Source: ATO Individual Tax Rates

CGT Discount by Entity Type

How much capital gains tax you pay depends on the ownership structure of the property. Different entity types receive different CGT discounts:

Capital Losses: What Happens When You Sell at a Loss

If your capital proceeds are less than your cost base, you make a capital loss. Capital losses can only be offset against capital gains — they cannot reduce your salary, rental income, or other types of income in your income tax calculation. If you have more capital losses than capital gains in a financial year, the excess is carried forward to future years indefinitely and can be used to reduce future capital gains tax.

The ATO requires you to apply capital losses before applying the 50% capital gains tax discount. This means losses reduce the full capital gain first, and then the discount is applied to calculate the taxable capital gain. For example, if you have a $100,000 capital gain and a $30,000 capital loss, your net capital gain is $70,000. The 50% discount then reduces your taxable capital gain to $35,000 for the capital gains tax calculation.

CGT Events, Reporting and When to Pay

A CGT event is triggered when you sell or dispose of a CGT asset. For property, the CGT event occurs on the date you sign the sale contract, not the settlement date. This means you need to report the taxable gain in your annual income tax return for the financial year the contract is signed. Your taxable gain is added to your current taxable income for that year, and the total is assessed including any medicare levy surcharge if applicable.

If you expect a large taxable gain from a property sold at a high sold price, consider adjusting your PAYG instalments during the year to avoid a large tax bill. The sold price minus your property's cost base and sale costs determines the gross gain. A qualified tax advisor can help you plan the timing of a CGT event to minimise the impact on your current taxable income. Use the calculator above to estimate your CGT liability based on the expected sold price.

CGT Exemptions, Concessions and Eligibility Criteria

Several exemptions and concessions can reduce or eliminate your CGT liability. Understanding the eligibility criteria for each is essential:

• Primary residence exemption: Your primary residence is generally exempt from CGT when sold. If you used the property as your primary residence for the entire ownership period, you qualify for a full CGT exemption. However, if you rented out your primary residence for any period, only a partial exemption may apply.
• Six-year absence rule: If you move out of your primary residence and rent it to produce income, you can treat it as your primary residence for up to six years. This means you may still receive the full CGT exemption when you sell, provided you do not nominate another property as your primary residence.
• Small business CGT concessions: Qualifying small business owners may access additional concessions including the 15-year exemption, 50% active asset reduction, retirement exemption, and rollover relief.
• Deceased estate: Inherited property may receive a modified cost base depending on when the deceased acquired the CGT asset and whether it was their primary residence.
• Personal use assets: Personal use assets (such as a holiday home used solely for personal enjoyment) may have different CGT treatment. Personal use assets acquired for less than $10,000 are exempt from CGT entirely.

A qualified tax advisor can help you determine which exemptions apply to your specific situation. For detailed information, see the ATO CGT Guide .

How to Avoid or Reduce CGT on Property in Australia

While you cannot completely avoid CGT on a property that has always been used to produce income, there are legitimate ways to reduce or defer your CGT liability. Understanding how CGT applies to your situation is the first step. Properties used to produce income (rental properties) are always subject to CGT when sold at a profit.

The most common way to achieve a full CGT exemption is the primary residence exemption — if the property was your home for the full period of ownership, no CGT applies on the sold price. The six-year absence rule can also help you achieve a full CGT exemption if you move out temporarily. Beyond these exemptions, the following strategies can significantly reduce your taxable gain.

Strategies to Reduce Your CGT Bill

Investors use several legitimate strategies to minimise the CGT payable on their assets:

• Hold for over 12 months: Always hold the CGT asset for at least 12 months to access the 50% CGT discount. This halves your taxable gain.
• Time the sale: Sell in a financial year when your current taxable income is lower. A lower base income means a lower marginal rate on the taxable gain.
• Maximise your property's cost base: Keep records of every improvement and acquisition cost, including conveyancing fees, stamp duty, and sale costs. The higher your property's cost base, the lower your taxable gain.
• Offset with losses: If you hold other CGT assets at a loss, consider selling them in the same year to offset gains. Losses reduce the full gain before the 50% discount is applied.
• Consider the ownership structure: Trusts can distribute gains to beneficiaries in lower brackets. SMSFs pay CGT at concessional rates. Choose the right structure before purchasing.
• Use the six-year rule: If the property was once your primary residence, you may qualify for a full CGT exemption by selling within six years of moving out.
• Partial exemption: If you lived in the property for part of the ownership period, you may qualify for a partial exemption based on the proportion of time it was your primary residence versus the time it was used to produce income.

CGT Changes in Australia for 2026

The 2025–26 financial year operates under the Stage 3 tax cuts, which changed the marginal tax rates that apply to capital gains. The former 32.5% tax bracket was reduced to 30%, and the $120,000 threshold moved to $135,000. These changes mean slightly lower CGT for most property investors selling in 2026.

The 50% CGT discount for individual investors remains unchanged, and there are no current proposals to remove or reduce it. The government has also maintained the small business CGT concessions and the main residence exemption.

Example: Calculating CGT on a $750,000 Property Sale

Here is a worked example to show how CGT applies in practice:

Record Keeping for Capital Gains Tax

The ATO requires you to keep records for five years after you lodge the tax return that includes the capital gain or loss. For property investors, this means keeping records of purchase contracts, settlement statements, improvement invoices, and all costs related to buying and selling.

PropBoss automatically captures and organises all property-related documents from your email, tracks capital improvements, and maintains your cost base in real time. When you sell, your CGT data is ready — no scrambling for receipts at tax time.

Frequently Asked Questions About CGT on Property

How does the 50% CGT discount work?

If you hold an investment property for at least 12 months, only 50% of the capital gain is added to your taxable income. Companies do not receive this discount.

What is the cost base for CGT?

The cost base includes the purchase price, stamp duty, legal fees, inspections, capital improvements, and other acquisition costs. A higher cost base reduces your capital gain.

When do I pay CGT?

CGT is part of your income tax return for the year you sign the sale contract. It is not paid separately. Adjust your PAYG instalments if you expect a large gain.

Can capital losses reduce my salary income?

No. Capital losses can only offset capital gains. Excess losses carry forward to future years indefinitely.

Is my home subject to CGT?

Generally no — your main residence is exempt from CGT. However, if you rented it out or used it for income-producing purposes, a partial exemption may apply.

How does CGT work with a family trust?

Trusts can distribute capital gains to beneficiaries, who then apply the 50% discount at their individual marginal rates. This allows gains to be split among family members in lower tax brackets.