Capital Gains Tax Calculator

When you sell an investment property for more than your cost base, the profit is considered a capital gain and is subject to Capital Gains Tax (CGT). Unlike a separate tax, CGT in Australia is part of your income tax — the taxable gain is added to your assessable income for the financial year you sell, and taxed at your marginal rate.

Your cost base is not simply the purchase price. It includes all legitimate acquisition costs: stamp duty, legal and conveyancing fees, and capital improvements (renovations, extensions, structural upgrades). These are costs that add to the property's value or were incurred to acquire or dispose of it. The higher your cost base, the lower your taxable gain.

For individual taxpayers who hold the property for 12 months or more, only 50% of the net capital gain is taxable — this is the CGT discount. Super funds receive a 33.33% discount, while companies receive no discount but pay a flat 25% company tax rate on the full gain.

Selling costs also reduce your gain. Agent commission, marketing fees, and legal costs on sale are all deducted from the sale price before the gain is calculated. Capital losses from other investments (shares, crypto) can further offset the gain.

Worked example: You purchased a property for $800,000 with $36,000 stamp duty and $3,000 in legal fees, giving a cost base of $839,000. You sell for $1,100,000 minus $27,000 in selling costs = $1,073,000 net proceeds. The capital gain is $234,000. After the 50% discount, the taxable gain is $117,000. At a 37% marginal rate (plus 2% Medicare levy), CGT is approximately $43,000.

The CGT discount is one of the most significant tax concessions available to Australian property investors. How much discount you receive — and how your gain is ultimately taxed — depends on the type of entity that owns the property and how long it has been held.

The table below illustrates the effective tax outcome on a $200,000 capital gain for each investor type. Note that individual and trust investors must hold for at least 12 months to qualify for any discount. Companies never receive a discount but benefit from a lower flat tax rate.

For most individual investors, holding for at least 12 months effectively halves the tax payable on the gain. This is why timing your sale — and understanding the settlement date implications — is critical. The CGT event occurs on the date of the contract, not settlement.

Maximising your cost base is one of the simplest ways to legally reduce your CGT. Keep records of every eligible expense from the day you purchase to the day you sell.

Tip: Keep all receipts and invoices for at least 5 years after disposal. The ATO may request evidence of your cost base claims. Digital records are acceptable.