Question 1

Do I pay CGT on my home?

Accepted Answer

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.

Question 2

What is the 50% CGT discount?

Accepted Answer

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.

Question 3

How do I reduce capital gains tax on property?

Accepted Answer

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.

Question 4

When do I pay CGT?

Accepted Answer

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).

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