Guide

What is capital gains tax (CGT)?

Capital gains tax is the income tax you pay on the profit when you sell an asset such as an investment property. It is not a separate tax: the gain is added to your income for that year. Your own home is generally exempt.

How the gain is worked out

1. Start with what you sold for.
2. Take away the cost base: what you paid, plus buying and selling costs such as stamp duty, legal fees and the agent's commission.
3. Take away any capital losses you have.
4. Apply any discount you qualify for.

What is left is your net capital gain. It goes into your tax return and is taxed at your income tax rate.

The 50% discount, as it works today

An Australian resident who has owned the asset for 12 months or more pays tax on only half the net gain. A gain of $200,000 becomes $100,000 of taxable income.

What changes on 1 July 2027

Parliament passed the changes in June 2026. From 1 July 2027:

• The 50% discount is replaced by cost base indexation. Your cost base is lifted in line with inflation, so you are taxed on the real gain.
• A 30% minimum tax applies to the gain that builds up after that date.
• Growth up to 1 July 2027 keeps the 50% discount, even if you sell years later.

Different rules apply to eligible new builds, and some people are exempt from the minimum tax. A registered tax agent can tell you where you stand.

Negative gearing, the other half of the change

• If you owned the property before 7:30 pm on 12 May 2026, nothing changes for it.
• If you buy an established home after that time, from 1 July 2027 its rental losses can only be set against other residential property income and gains, not against your wages.
• New builds keep full negative gearing.

What this page cannot do

Working out your own capital gains tax depends on your income, how you hold the property and how long you have owned it. That is a job for a registered tax agent.

Sources

• Australian Taxation Office: working out your capital gain
• Treasury: Budget 2026-27 tax system changes
• Accountants Daily: CGT changes clear both houses of parliament, 25 June 2026

Checked against the sources above on 14 November 2026. 中文版

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