Capital Gains Tax (CGT)
Tax on the profit made from selling or disposing of an asset, such as property, shares, or cryptocurrency.
Capital Gains Tax (CGT) applies to the profit (capital gain) you make when you sell, gift, or otherwise dispose of a CGT asset. Despite the name, CGT is not a separate tax — capital gains are added to your assessable income and taxed at your marginal income tax rate. CGT applies to assets acquired on or after 20 September 1985, including real estate (other than your main residence), shares, managed fund units, cryptocurrency, collectables over $500, and business assets.
A capital gain is calculated as the difference between the capital proceeds (what you receive) and the cost base (what you paid, plus incidental costs like stamp duty, legal fees, and improvement costs). If the proceeds are less than the cost base, you have a capital loss, which can only be offset against capital gains (not other income) and can be carried forward indefinitely.
Individuals and trusts that held an asset for at least 12 months before disposal are eligible for the 50% CGT discount, meaning only half the net capital gain is included in assessable income. Complying super funds receive a one-third (33.33%) discount. Companies receive no CGT discount. The CGT discount is one of the most significant tax concessions in the Australian tax system and is a key consideration in investment timing decisions.