How is capital gains tax calculated on property in Australia?

CGT on property is calculated as: (1) Work out your cost base — purchase price plus stamp duty, legal fees, and capital improvements. (2) Calculate your capital gain — net sale proceeds (sale price minus agent fees and legal costs) minus cost base. (3) If you held the property for more than 12 months, apply the CGT discount (50% for individuals). (4) Add the discounted gain to your other taxable income. (5) Pay tax at your marginal rate. Our calculator handles all these steps.

What is the 50% CGT discount?

If you hold an investment property for more than 12 months before selling, you're only required to include 50% of the capital gain in your assessable income (for individuals). The remaining 50% is exempt. For example, a $200,000 gain becomes a $100,000 taxable gain. Superannuation funds receive a 33.33% discount; companies receive no discount. The discount applies to the gain after offsetting any capital losses.

What costs can I include in my CGT cost base?

Your cost base includes: the purchase price, stamp duty paid at purchase, conveyancing and legal fees at purchase, title search fees, capital improvements you made to the property (renovations, extensions, new structures), and certain holding costs if not otherwise deductible. Note: ongoing deductible expenses like interest and rates are NOT included in the cost base. Agent commissions and legal fees at sale reduce your capital proceeds (net sale price).

Can capital losses reduce my CGT?

Yes. Capital losses from the same year or carried forward from previous years can offset your capital gains before the CGT discount is applied. For example, if you have a $300,000 gain and $50,000 in capital losses, only $250,000 is subject to the discount. Capital losses can only offset capital gains — they cannot reduce ordinary income. Unused losses carry forward indefinitely.

When do I pay CGT — at settlement or at tax time?

CGT is not withheld at settlement. You pay it as part of your annual income tax assessment. The capital gain is included in your tax return for the financial year in which the contract of sale was signed (not settlement date). For properties settled after 30 June, check whether the contract date falls in the current or next financial year. You may need to make a PAYG instalment if the tax amount is large.

What if I lived in the property as my main residence?

Your main residence is generally fully exempt from CGT. If the property was your main residence for only part of the ownership period (e.g. you moved out and rented it), a partial exemption applies. The taxable portion is calculated as: (days used as investment / total days owned) × capital gain. The 6-year rule also allows you to treat a property as your main residence for up to 6 years after moving out, as long as you don't designate another property as your main residence.

Do I need to pay CGT if I make a capital loss?

No. If your net proceeds are less than your cost base, you've made a capital loss, not a capital gain, so no CGT applies. You can use the capital loss to offset other capital gains in the same year, or carry it forward to offset future capital gains. Capital losses cannot be used to reduce ordinary income.

How does CGT interact with negative gearing deductions?

Negative gearing deductions taken during ownership may reduce your cost base in certain circumstances — specifically, deductible holding costs (interest, rates, insurance etc.) that were claimed can reduce your cost base if they fall into cost base element 3. However, for most investors the practical impact is limited since those deductions were already taken as income deductions during the rental period. Your accountant can calculate the precise cost base adjustments.

Capital Gains Tax Calculator Australia 2026

Estimate the capital gains tax you'll owe when selling your Australian investment property. Includes the 50% CGT discount for assets held over 12 months and capital loss offsets.

Purchase Details

Purchase Price

Purchase Costs

Stamp duty, conveyancing, title fees

Capital Improvements

Renovations and extensions (not repairs)

Purchase Date

Sale Details

Sale Price

Selling Costs

Agent commission, legal fees, marketing

Sale Date (contract date)

Use contract signing date, not settlement date

Tax Profile

Entity Type

Marginal Tax Rate

Use your rate for the financial year of sale

Capital Losses Carried Forward

From previous years' tax returns

Estimated CGT Payable

$39,780

at 39% marginal rate

Taxable Capital Gain

$102,000

after 50% discount

Gross Capital Gain

$204,000

before discount & losses

Effective Tax Rate

19.5%

of gross gain

CGT Calculation Breakdown

Sale Price$900,000

Less: Selling Costs−$18,000

Net Proceeds$882,000

Less: Cost Base−$678,000

Gross Capital Gain$204,000

CGT Discount (50% — held 59 months)−$102,000

Net (Taxable) Capital Gain$102,000

Tax at 39%$39,780

Cost Base Breakdown

Purchase Price$650,000

Purchase Costs (stamp duty, legal fees)$28,000

Capital Improvements$0

Total Cost Base$678,000

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Rentvesting Calculator

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Understanding Capital Gains Tax on Investment Property in Australia

The CGT Discount

•Individuals: 50% discount on gains held over 12 months
•Super funds: 33.33% discount
•Companies: No discount

What's in Your Cost Base?

•Purchase price
•Stamp duty and legal fees at purchase
•Capital improvements (renovations, extensions)

Frequently Asked Questions — Capital Gains Tax

Disclaimer

This calculator provides estimates for general information purposes only and does not constitute financial or tax advice. Always consult a qualified accountant or tax professional before making decisions about selling investment properties.