Capital gains tax on shares & property, explained (2026-27)

The first thing to know about capital gains tax (CGT) in Australia: there is no separate CGT rate. When you sell an asset for more than it cost, the gain is added to your taxable income for that year and taxed at your marginal rate. So your "CGT rate" is really just your income tax rate — which is why selling in a lower-income year can cost you far less.

How a capital gain is worked out

Your capital gain is the proceeds (what you sold for) minus the cost base (what you paid, plus buying and selling costs like brokerage, stamp duty and legal fees, and some holding costs). If the number is negative, it's a capital loss — which can't reduce your ordinary income, but can offset other capital gains now or in future years.

The 50% CGT discount

This is the big one. If you're an Australian resident individual and you held the asset for at least 12 months before selling, only half the gain is taxed. Sell inside 12 months and the whole gain is taxed. If you're close to the 12-month mark, waiting for the anniversary can roughly halve the tax — one of the few genuinely simple CGT levers.

The order matters: you subtract any capital losses first, then apply the 50% discount to what remains.

A worked example

Say you earn $95,000 and sell shares for a $100,000 gain you've held for three years. After the 50% discount, only $50,000 is added to your income. That extra $50,000 is taxed at your marginal rate (30–37%), working out to roughly $16,700 of tax — about 17% of the actual gain. Held under 12 months, the whole $100,000 would be taxed, and the bill would more than double.

What's exempt

Your main residence is generally exempt — the family home usually isn't subject to CGT. Cars and most personal-use assets are exempt too. CGT mostly bites on investment properties, shares, ETFs and crypto. (Yes — crypto is a CGT asset, and every disposal, including swapping one coin for another, is a CGT event.)

Ways people reduce CGT — legitimately

• Hold past 12 months to get the 50% discount.
• Realise losses in the same year to offset gains (be aware of the ATO's "wash sale" rules if you buy straight back).
• Time the sale for a year your income — and marginal rate — is lower.
• Superannuation contributions can lower your taxable income in the year of a big gain.

Related: how income tax works · income tax calculator. General information only, not tax advice — the rules have exceptions, so check the ATO or a registered tax agent for your situation.