Capital Gains Tax (CGT) in Australia 

Understand How CGT Affects You and Your Assets

Capital Gains Tax (CGT) is the tax you may be required to pay on profits (capital gains) made from selling certain types of assets. It is not a separate tax — it forms part of your income tax and is reported in your annual tax return.

CGT generally applies to CGT events involving assets acquired on or after 20 September 1985.

📚 For the ATO’s full overview on CGT, visit the Capital gains tax hub.

What is a CGT Event?

A CGT event is a transaction or occurrence that results in a capital gain or capital loss. The most common CGT event is the sale or gifting of an asset.

✅ Example:

You purchase shares in 2020 for $10,000 and sell them in 2025 for $15,000. The $5,000 gain may be subject to CGT, depending on your situation.

There are more than 50 types of CGT events. View the complete list on the ATO’s CGT events page.

What is a CGT Asset?

A CGT asset includes any type of property, or a legal/equitable right that isn’t tangible property.

Common CGT assets include:

  • Land and buildings

  • Shares, units, and other securities

  • Cryptocurrency

  • Business goodwill

  • Partnership interests

  • Licences and leases

  • Collectables and personal use assets

  • Rights under a contract (e.g. options or debts owed)

💡 Note: A car is a CGT asset, but capital gains made on personal-use vehicles are generally exempt from CGT, unless they are used in business and other rules apply.

How Capital Gains or Losses Are Calculated

A capital gain occurs when the sale price (capital proceeds) exceeds the original cost base (purchase price + incidental costs).
A capital loss occurs when the sale price is less than the reduced cost base.

✅ Example:

You sell an investment property for $800,000. You originally purchased it for $600,000 and incurred $50,000 in legal, stamp duty, and improvement costs.

  • Cost base = $650,000

  • Capital gain = $150,000

If you held the property for 12 months or more, you may be eligible for the CGT discount.

CGT Discounts (2025 Rates)

You may be eligible for a discount on your capital gain if:

  • You held the asset for at least 12 months, and

  • You are an Australian resident individual, a trust, or a complying superannuation fund

✅ Current CGT Discounts:

  • 50% for Australian resident individuals and trusts

  • 33.33% for complying superannuation funds

  • Not available to companies

Trustees can generally pass on discounted gains to beneficiaries who are presently entitled.

➡️ More: CGT Discount – ATO Guide

Capital Losses

  • Capital losses can only offset capital gains, not other types of income (e.g. salary, rent).

  • Losses can be carried forward indefinitely to offset future gains.

  • Losses should be applied carefully to ensure they don’t reduce access to the CGT discount or small business concessions.

Exemptions and Rollovers

The ATO provides various exemptions and rollovers, including:

  • Main residence exemption – no CGT applies to your primary home in most cases

  • Small business CGT concessions – including 15-year exemption, 50% active asset reduction, and retirement exemption

  • Marriage and relationship breakdown rollover

  • Involuntary disposal (e.g. natural disasters or compulsory acquisition)

➡️ More: Small business CGT concessions – ATO

Foreign Residents & Temporary Residents

Foreign residents are generally only subject to CGT on taxable Australian property, such as:

  • Real estate located in Australia

  • Mining, quarrying, or prospecting rights

  • Interests in entities that own significant Australian real estate (indirect interests)

❗ Main residence exemptions no longer apply to foreign residents unless certain conditions are met.

Temporary residents are taxed similarly to foreign residents but may be entitled to some exemptions depending on their visa status and residency period.

➡️ More: Foreign residents and CGT – ATO

Foreign Resident Capital Gains Withholding (FRCGW)

If you're purchasing Australian real estate worth $750,000 or more, and the seller is a foreign resident, the buyer must withhold 12.5% of the purchase price and remit it to the ATO.

➡️ Learn more: FRCGW rules – ATO

How We Can Help

At Complete Tax & Financial Services, we help clients:

  • Accurately calculate capital gains or losses

  • Maximise eligibility for discounts, exemptions, and rollovers

  • Understand the impact of residency or business structures

  • Navigate complex share, property, or crypto CGT events

  • Structure their investment or business exits tax-effectively

📞 Contact us today to ensure you’re making the most of your assets — and not paying more CGT than necessary.

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