Capital Gains Tax
Get the Calculation Right and Pay Only What You Owe
Selling an investment property, shares, or other assets triggers a capital gains tax event in Australia. The amount you pay depends on a number of factors: the cost base of the asset, how long you held it, your marginal tax rate, and which concessions you are entitled to apply. Get any of these wrong and you either overpay or face ATO scrutiny.
We dig deep to claim every dollar you're entitled to—so nothing’s left behind.
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- What Is Capital Gains Tax?
What Is Capital Gains Tax in Australia
Capital gains tax in Australia is not a separate tax. It is the tax you pay on the net capital gain you make when you dispose of an asset, added to your assessable income for the year and taxed at your marginal rate.
A capital gain arises when you sell or dispose of an asset for more than its cost base. A capital loss arises when you sell for less than the cost base. Losses can be offset against gains made in the same year or carried forward to offset future gains. Capital gains tax applies to most assets acquired after 19 September 1985.
Investment Property
Residential, commercial, and holiday properties. Cost base includes purchase price, stamp duty, legal fees, and capital improvements.
Shares & Managed Funds
Listed and unlisted shares, ETFs, managed funds, and DRP acquisitions. Multiple parcel identification methods applied.
Cryptocurrency
Bitcoin, Ethereum, and all crypto assets. Every disposal, swap, and DeFi event calculated correctly under ATO guidance.
Business Assets
Active business assets, goodwill, and intangibles. Small business CGT concessions assessed for every eligible sale.
If you have ever lived in the property you are selling, the apportionment of the main residence exemption becomes complex. We handle these calculations correctly.
- Investment Property
Capital Gains Tax on Property
Capital gains tax on property is one of the most significant and commonly misunderstood tax obligations for Australian property investors. Whether you have sold a residential investment property, a commercial property, or a holiday home, a CGT event has occurred and must be reported correctly.
Main Residence Exemption
Your primary place of residence is generally exempt from capital gains tax in Australia. However, the exemption is not automatic and comes with conditions. If you rented out your home at any point, used any part of it for business purposes, or were absent from it for extended periods, the exemption may be reduced or unavailable for that portion of time.
If you have ever lived in the property you are selling, the apportionment of the main residence exemption becomes complex. We handle these calculations correctly.
What Determines Your CGT on Investment Property
-
Cost base:
purchase price plus stamp duty, legal fees, ag -
Capital proceeds:
sale price less selling costs including agent commissions and legal fees -
Holding period:
assets held more than 12 months qualify for the 50% CGT discount -
Prior capital losses:
any carried forward losses from previous years reduce the net gain
The 50% CGT discount is the single most valuable tax concession on a property sale for most investors — and must be claimed correctly to apply.
- Shares & Managed Funds
How to Calculate Capital Gains Tax on Shares
Understanding how to calculate capital gains tax on shares is important for any Australian investor who has sold shares, received DRP acquisitions, or participated in corporate actions such as mergers, demergers, or rights issues.
The capital gain on a share sale is calculated as the capital proceeds minus the cost base. The cost base for shares includes the original purchase price plus brokerage paid at both purchase and sale. If you acquired shares through an employee share scheme, the cost base calculation follows specific rules that differ from standard market purchases.
If you are on a short-stay visa, arrived partway through the financial year, or do not meet the residency tests, you may be classified as a non-resident for tax purposes. Non-residents are taxed at higher rates, do not receive the tax-free threshold, and are generally only taxed on Australian-sourced income.
The distinction between resident and non-resident can make a material difference to your refund. Getting this classification wrong, in either direction, results in either overpaying or an ATO liability later.
Shares acquired through a dividend reinvestment plan have their own cost base based on the market value at the time of acquisition. Each DRP acquisition is a separate parcel and must be tracked individually when calculating a capital gain on sale.
The 50% CGT discount applies to shares held for more than 12 months before sale, the same as for property. If you hold shares in multiple parcels with different acquisition dates, the discount may apply to some parcels but not others. We identify which parcels qualify and calculate accordingly.
- Small Business Owners
Capital Gains Tax Small Business Concessions
Capital gains tax small business concessions are among the most generous tax concessions available under Australian tax law — specifically designed to reduce or eliminate the CGT liability on the sale of active business assets. In the right circumstances, these concessions can result in a zero CGT outcome.
Most Significant
15-Year Exemption
If you have owned a business asset continuously for at least 15 years and you are 55 or older and retiring — or permanently incapacitated — the entire capital gain may be exempt from CGT. This is the most significant of the four concessions.
50% Reduction
50% Active Asset Reduction
If the asset being sold is an active asset of your business, you can reduce the capital gain by 50% in addition to the general 50% discount. This can reduce the assessable gain to as little as 25% of the original gain.
Up to $500,000
Retirement Exemption
Exempt capital gains up to a lifetime limit of $500,000 from the sale of active business assets. If you are under 55, the exempt amount must be contributed to a superannuation fund or retirement savings account.
Defer the Gain
Rollover Concession
If you intend to replace the business asset with a new one, you can defer the capital gain for up to two years after the sale. The gain is not eliminated but its timing can significantly improve your cash flow position.
Eligibility criteria: Your business must generally have an aggregated annual turnover of less than $2 million, or your net assets must be less than $6 million. The asset must also satisfy the active asset test — used or held ready for use in your business for at least half of the ownership period.*
- HOW IT WORKS
How to Lodge Your Capital Gains Tax Return With Tax NextGen
Step 1
Book a Free Consultation
Select Capital Gains Tax Return as your service and book a time that works for you. Let us know the type of asset you have sold: property, shares, crypto, or business asset, so we can match you with the right consultant.
Step 2
Speak With a Registered Tax Agent
Our tax agent will call you at the agreed time. We will work through your asset, the acquisition and disposal details, your holding period, any prior capital losses, and every concession you may be entitled to apply.
Step 3
We Lodge, You Get Your Refund
We prepare the full CGT schedule and include it in your tax return. We walk you through the figures before lodging so you understand exactly what has been included and why. Your return is lodged correctly and on time.
- WHY TAX NEXTGEN
Why Investors Choose Tax NextGen for Capital Gains Tax
We know the CGT rules in detail
Cost base rules, discount provisions, exemptions, rollover concessions, and small business concessions — each with their own eligibility conditions. We apply every rule that benefits your position.
We get the cost base right
The cost base calculation is where most CGT errors occur. We account for every element — purchase costs, improvement costs, and incidental costs at disposal — to ensure your gain is not overstated.
We identify all available concessions
From the 50% discount to the main residence exemption and all four small business CGT concessions, we review every concession before we touch the lodgement.
We handle complex situations
Partial exemptions, mixed-use properties, share parcels, employee share scheme acquisitions, and business asset sales all require detailed analysis. We handle these routinely.
Registered and qualified
Every CGT return is prepared by a Chartered Accountant or CPA registered with the Tax Practitioners Board. Authorised to lodge on your behalf.
- REVIEWS
What Our Clients Say
Our rental property clients come back year after year because they know their return is being handled by people who understand investment property tax in detail.
- FAQ
Frequently Asked Questions
1. Do I have to pay capital gains tax when I sell my home?
In most cases, your main residence is exempt from capital gains tax in Australia under the main residence exemption. However, if you rented the property out, used part of it for business, or were absent from it for an extended period, the exemption may only apply to part of the gain. The rules are detailed and the calculation must be done correctly. Contact us if you are selling a property that has had mixed use.
2. How is capital gains tax on investment property calculated?
Capital gains tax on investment property is calculated by subtracting the cost base of the property from the capital proceeds. The cost base includes the purchase price, stamp duty, legal fees at purchase, and the cost of any capital improvements. The capital proceeds are the sale price less selling costs. If you have held the property for more than 12 months, a 50% discount applies to the net gain before it is added to your taxable income.
3. How do I calculate capital gains tax on shares?
4. What is the CGT discount rate in Australia?
Individuals who have held an asset for more than 12 months are entitled to a 50% discount on their capital gain. This means only half of the net capital gain is included in their assessable income. Companies are not entitled to the 50% discount. Superannuation funds receive a one-third discount. Trusts can pass the 50% discount through to individual beneficiaries if the asset has been held for more than 12 months.
5. Can I offset capital losses against capital gains?
6. What is rental property capital gains tax and when does it apply?
7. Do small business owners get CGT concessions when selling their business?
Yes. Capital gains tax small business concessions can significantly reduce or eliminate CGT on the sale of active business assets for eligible small business owners. The four concessions are the 15-year exemption, the 50% active asset reduction, the retirement exemption, and the rollover concession. Eligibility depends on your business turnover, net assets, and how long you have owned and actively used the asset. We assess your eligibility as part of every business asset sale engagement.
8. When do I need to report and pay capital gains tax?
Make Sure Your Capital Gains Tax Is Calculated Correctly
Do not leave your CGT calculation to chance. A wrong cost base, a missed concession, or an incorrect discount application can cost you thousands. Book a free consultation with one of our registered tax agents and get it right the first time.
No cost to consult. Transparent fees. Every concession reviewed.
