Capital Gains Tax (CGT) applies when you sell an asset for more than you paid for it. It affects property investors, share traders, crypto holders and anyone who sells a business asset. Here is how it works in Australia in 2026.
How CGT Is Calculated in Australia
CGT in Australia is not a separate tax — your capital gain is added to your assessable income for the year and taxed at your marginal rate. The formula is:
Cost Base includes: purchase price + stamp duty + legal fees + improvements + selling costs
Taxable Gain = Capital Gain × 50% (if held 12+ months) or full gain (if held <12 months)
The 50% CGT Discount
If you hold an asset for more than 12 months before selling, you only pay CGT on 50% of the gain. This is one of the most significant tax benefits in the Australian system and is why long-term property and share investing is tax-advantaged compared to short-term trading.
CGT Rates — 2025–26
| Taxable Income After Gain | Marginal Rate | Effective CGT Rate (50% disc) |
|---|---|---|
| $18,201 – $45,000 | 16% | 8% |
| $45,001 – $135,000 | 30% | 15% |
| $135,001 – $190,000 | 37% | 18.5% |
| Over $190,000 | 45% | 22.5% |
CGT on Investment Property
When you sell an investment property, CGT applies to the difference between your cost base and sale price. The cost base includes stamp duty, legal fees, conveyancing costs, and capital improvements (not repairs). Depreciation you’ve claimed may reduce your cost base. The family home is generally exempt from CGT.
CGT on Shares and Crypto
Shares and cryptocurrency are CGT assets. Each trade or disposal is a CGT event. For crypto specifically, the ATO treats each swap, sale or use of crypto as a disposal — even trading one cryptocurrency for another triggers CGT. Accurate record-keeping of every transaction is essential.
Strategies to Minimise CGT
- Hold for 12+ months — the 50% discount is your single biggest lever
- Time the sale — sell in a low-income year (e.g. after retirement) to reduce the marginal rate applied
- Offset with capital losses — losses from other assets can reduce your capital gain
- Main residence exemption — living in a property can reduce or eliminate CGT
- Super contributions — salary sacrificing to super in a high-income year reduces taxable income before CGT is applied
Calculate Your Income Tax
See how a capital gain will affect your total tax bill this year.
Disclaimer: General information only. Not financial advice. Always consult a licensed professional before making financial decisions.