Capital Gains Tax (CGT) in Australia (2026)
About this article
Sourced from Commonwealth Acts of Parliament, federal regulations, and official government guidance. State-level information reflects each state's own Acts and court decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
Compare by state
Statute citations are verified per state. Select a state to jump to its full section below.
| Primary statute | |
|---|---|
| New South Wales | Duties Act 1997 (NSW) |
| Queensland | Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — capital gains |
| South Australia | Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — CGT |
| Tasmania | Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — CGT |
| Victoria | Duties Act 2000 (Vic) |
| Western Australia | Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — capital gains |
What is this right?
Capital Gains Tax (CGT) applies when you sell or dispose of a CGT asset — such as shares, investment property, cryptocurrency, or a business — for more than you paid for it. CGT is governed by Parts 3-1 and 3-3 of the ITAA 1997.
CGT is not a separate tax. Your net capital gain is added to your assessable income and taxed at your marginal rate. If you make a capital loss, you can carry it forward to offset future capital gains, but not against ordinary income.
If you hold an asset for more than 12 months, you may be entitled to the 50% CGT discount, meaning you only include half the gain in your income. This discount is available to individuals and trusts, but not companies.
Your main residence (the home you live in) is generally fully exempt from CGT under the main residence exemption. However, the exemption may be reduced if you used the property to produce income (such as renting out a room) or if it was on land larger than 2 hectares.
Small business CGT concessions can significantly reduce or eliminate CGT on the sale of active business assets if the business meets the $2 million turnover test or the $6 million net asset value test.
When does it apply?
This applies whenever you sell, gift, or dispose of a CGT asset.
- Common CGT events include selling shares, investment property, cryptocurrency, collectibles over $500, and business assets.
- CGT also applies if you receive a capital payment from a trust or company.
- The main residence exemption covers the home you live in, subject to conditions.
What to Do If You Have a Capital Gains Tax Liability in Australia
- Keep detailed records of purchase price, purchase date, improvement costs, and selling costs for every CGT asset.
- Hold assets for more than 12 months where practical to access the 50% CGT discount.
- Report all CGT events in your tax return — including cryptocurrency transactions.
- If selling a business, check if you qualify for small business CGT concessions under Division 152.
- Offset capital losses against capital gains in the same year, and carry forward any remaining losses.
- If your main residence was used for income (e.g., Airbnb), calculate the partial exemption based on the period and portion used for income.
What should you NOT do?
- Don't ignore cryptocurrency — the ATO receives data from exchanges and tracks crypto disposals.
- Don't offset capital losses against salary or wages — losses can only offset capital gains.
- Don't assume the main residence exemption applies if you rented out your home or owned it through a company or trust.
- Don't forget to include costs like agent fees, stamp duty, and legal costs in your cost base — they reduce your gain.
- Don't sell assets just before the 12-month mark — waiting a few extra days could halve your tax bill through the CGT discount.
About Tax Rights in Australia
The tax year runs 1 July to 30 June and most individuals lodge by 31 October. Income tax is set by the Income Tax Assessment Acts 1997 and 1936; GST (10%) sits under the A New Tax System (GST) Act 1999. If you disagree with an ATO assessment, you have 60 days to lodge an objection under Part IVC of the Taxation Administration Act 1953. Appeals go to the Administrative Review Tribunal (replaced AAT October 2024) or the Federal Court. The Inspector-General of Taxation handles complaints about ATO conduct.
Worked Examples
ScenarioYou bought ASX shares for $20,000 and sold them 18 months later for $30,000.
OutcomeYour net capital gain is $10,000. Because you held the shares for more than 12 months as an Australian-resident individual, the 50% CGT discount applies — you include only $5,000 in your assessable income for the year, taxed at your marginal rate. The $ figures are illustrative; the 50% discount and 12-month rule are the legal points.
Verified against the ATO: 50% CGT discount for individuals holding assets 12+ months. The $ figures are illustrative. Different rules apply to companies and foreign residents. Educational information, not tax or legal advice.
Common Questions
How much CGT will I pay?
CGT is not a separate tax — it's added to your other income and taxed at your marginal income tax rate. For Australian-resident individuals who hold an asset for 12 months or more, only 50% of the net gain is included in your income (the 50% CGT discount), effectively halving the tax.
Is my home exempt from CGT?
Generally yes. Your main residence is exempt from CGT if it's been your home for the whole period you owned it and you haven't used it to produce income (such as renting it out). Partial exemptions apply if it was your home for only part of the time or you used part for business.
What is the 12-month rule?
To qualify for the 50% individual CGT discount, you must have held the asset for at least 12 months before the CGT event (usually the contract date for sale). Hold for less and the full gain is included in your income. The 12-month rule doesn't apply to companies and is different for trusts and super funds.
Can I use losses to reduce CGT?
Yes. Capital losses can offset capital gains made in the same year, and any unused losses can be carried forward indefinitely to offset future gains. Importantly, capital losses can only offset capital gains, not other income like salary — so timing your gains and losses can matter.
What is the capital gains tax right in Australia?
Capital Gains Tax (CGT) applies when you sell or dispose of a CGT asset — such as shares, investment property, cryptocurrency, or a business — for more than you paid for it. CGT is governed by Parts 3-1 and 3-3 of the ITAA 1997.CGT is not a separate tax. Your net capital gain is added to your assessable income and taxed at your marginal rate. If you make a capital loss, you can carry it forward to offset future capital gains, but not against ordinary income.If you hold an asset for more than 12 months, you may be entitled to the 50% CGT discount, meaning you only include half the gain in your...
When does capital gains tax apply?
This applies whenever you sell, gift, or dispose of a CGT asset.Common CGT events include selling shares, investment property, cryptocurrency, collectibles over $500, and business assets.CGT also applies if you receive a capital payment from a trust or company.The main residence exemption covers the home you live in, subject to conditions.
What should I do if I have made a capital gain and am unsure how to report it to the ATO in Australia?
Keep detailed records of purchase price, purchase date, improvement costs, and selling costs for every CGT asset.Hold assets for more than 12 months where practical to access the 50% CGT discount.Report all CGT events in your tax return — including cryptocurrency transactions.If selling a business, check if you qualify for small business CGT concessions under Division 152.Offset capital losses against capital gains in the same year, and carry forward any remaining losses.If your main residence was used for income (e.g., Airbnb), calculate the partial exemption based on the period and portion...
What mistakes should I avoid with capital gains tax?
Don't ignore cryptocurrency — the ATO receives data from exchanges and tracks crypto disposals.Don't offset capital losses against salary or wages — losses can only offset capital gains.Don't assume the main residence exemption applies if you rented out your home or owned it through a company or trust.Don't forget to include costs like agent fees, stamp duty, and legal costs in your cost base — they reduce your gain.Don't sell assets just before the 12-month mark — waiting a few extra days could halve your tax bill through the CGT discount.
State-by-state details
New South Wales
Primary statute: Duties Act 1997 (NSW)
Capital gains tax (CGT) is a federal tax — there is no separate state CGT in NSW. However, NSW state taxes interact with capital transactions, particularly through stamp duty (transfer duty) and land tax.
- When you sell property in NSW, you pay federal CGT on any capital gain (assessable under the Income Tax Assessment Act 1997). The buyer pays NSW transfer duty on the purchase price or market value.
- NSW transfer duty rates are progressive, currently ranging from 1.25% to 7% depending on the property value (Duties Act 1997 (NSW)). The NSW Government has proposed replacing stamp duty with an annual property tax for future buyers, though this reform is being phased in gradually.
- NSW does not tax capital gains on shares or other non-real-property assets at the state level.
- For investment properties, NSW land tax paid during the ownership period is added to the property's cost base for CGT purposes, potentially reducing the capital gain when you sell.
Queensland
Primary statute: Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — capital gains
Full Queensland guide →South Australia
Primary statute: Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — CGT
Capital gains tax (CGT) is a federal tax under the Income Tax Assessment Act 1997 (Cth). SA does not impose a state CGT, but SA-specific state taxes interact with CGT events.
- When selling real property in SA, the vendor is liable for federal CGT on any capital gain (unless the main residence exemption applies). The cost base includes stamp duty paid to RevenueSA on the original purchase.
- SA land tax paid during the ownership period of an investment property is deductible against rental income (not the capital gain), but affects overall tax planning.
- SA's transfer duty (stamp duty) is payable by the purchaser on the transfer of real property and is calculated on the greater of the purchase price or market value under the Stamp Duties Act 1923 (SA).
- The 50% CGT discount is available for assets held longer than 12 months. Small business concessions (under Division 152 of the ITAA 1997) are available to eligible SA small business owners selling business assets.
Tasmania
Primary statute: Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — CGT
Capital gains tax (CGT) is a federal tax under the Income Tax Assessment Act 1997 (Cth). Tasmania does not impose a state CGT, but Tasmanian state taxes interact with CGT events.
- When selling real property in Tasmania, the vendor is liable for federal CGT on any capital gain (unless the main residence exemption applies). The cost base includes duty paid to the SRO on the original purchase.
- Tasmanian land tax paid during the ownership period of an investment property is deductible against rental income (not the capital gain), but affects overall tax planning.
- Tasmania's conveyance duty is payable by the purchaser on the transfer of real property under the Duties Act 2001 (Tas), calculated on the greater of the purchase price or market value.
- The 50% CGT discount is available for assets held longer than 12 months. Small business concessions (under Division 152 of the ITAA 1997) are available to eligible Tasmanian small business owners, which is particularly relevant given the high proportion of small businesses in the state.
Victoria
Primary statute: Duties Act 2000 (Vic)
Capital gains tax is a federal tax — Victoria does not impose a separate state CGT. However, Victorian state taxes interact with capital transactions through land transfer duty, land tax, and the Windfall Gains Tax.
- When you sell property in Victoria, the seller pays federal CGT on any capital gain. The buyer pays Victorian land transfer duty on the purchase price or market value.
- Victorian land transfer duty rates are progressive. Victoria also has a premium duty rate for properties valued over $2 million.
- Victoria's Windfall Gains Tax (from 1 July 2023) applies specifically to land that increases in value by more than $100,000 due to a government rezoning decision. The tax is 50% of the uplift above $500,000 (with a sliding scale for uplifts between $100,000 and $500,000). This is in addition to any federal CGT payable on eventual sale.
- Land tax paid to the SRO during the ownership period is added to the property's cost base for federal CGT purposes.
Western Australia
Primary statute: Income Tax Assessment Act 1997 (Cth), Parts 3-1, 3-3 — capital gains
Full Western Australia guide →Capital Gains Tax in other states
Same topic, different jurisdiction. Pick the one that applies to you.