Do I pay CGT on my home?

Your principal place of residence (PPOR) is generally exempt from capital gains tax in Australia. This is known as the 'main residence exemption'. However, if you rented out part of your home, used it for business, or were a non-resident for part of the ownership period, a partial CGT liability may apply. Investment properties, holiday homes, and vacant land are all subject to CGT when sold.

What is the 50% CGT discount?

Australian resident individuals who hold an asset for at least 12 months before selling are entitled to a 50% discount on the capital gain. This means only half the capital gain is added to your taxable income. For example, if you make a $200,000 capital gain on a property held for 3 years, only $100,000 is added to your taxable income. The discount does not apply to companies. Self-managed super funds (SMSFs) receive a 33.3% discount instead.

How do I reduce capital gains tax on property?

You can reduce CGT on investment property by: (1) holding for at least 12 months to qualify for the 50% discount, (2) including all capital improvements (renovations, extensions) in your cost base, (3) including buying and selling costs (stamp duty, legal fees, agent commissions) in the cost base, (4) timing the sale to a year where your other income is lower, and (5) making additional super contributions to offset the gain. Keep detailed records of all costs from the date of purchase.

CGT on a property sale is payable when you lodge your income tax return for the financial year in which the sale contract was signed (not the settlement date). The capital gain is added to your other taxable income for that year, and tax is calculated at your marginal rate. If you sold in January 2026, the CGT would be included in your 2025-26 tax return, typically due by 31 October 2026 (or later if lodged through a tax agent).

CGT Calculator — Investment Property

Calculate capital gains tax on your investment property sale. See the 50% CGT discount, estimated tax at your marginal rate, and net profit after tax.

Last verified: 1 July 2025

How is capital gains tax calculated on an investment property in Australia?

Capital gain = sale price minus cost base (purchase price plus stamp duty, legal fees, agent commission, and capital improvements). If an Australian tax resident individual held the property for 12+ months, a 50% CGT discount applies, so only half the gain is added to taxable income and taxed at your marginal rate. Source: Australian Taxation Office.

Worked example. Bought for $600,000 (plus $25,000 buy costs), sold for $820,000 (minus $18,000 sell costs). Capital gain = $177,000. Held 3 years → 50% discount → $88,500 added to taxable income. At the 37% marginal bracket that is roughly $32,745 in CGT, leaving net profit of about $144,255.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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