Why use this calculator
Capital Gains Tax is one of the most significant tax considerations when selling investment assets in Australia. Understanding your CGT liability before selling helps you make informed decisions about timing, structure, and whether to proceed with a sale. The 50% CGT discount for assets held longer than 12 months can save you tens of thousands of dollars, making holding period a critical factor in investment decisions.
How to use it
Enter the original purchase price, the sale price, select whether you held the asset for under or over 12 months, your marginal tax rate, and any capital improvements you have made to the asset. The calculator determines your taxable capital gain and estimated CGT payable.
The formula
Capital Gain = Sale Price - (Purchase Price + Improvements). For assets held over 12 months: Taxable Gain = Capital Gain x 50%. CGT Payable = Taxable Gain x Marginal Tax Rate. The 50% discount applies to individuals and trusts but not companies.
Worked examples
Property bought at $400,000, sold at $600,000, held over 12 months, $10,000 improvements, 37% rate
Capital gain of $190,000, taxable gain of $95,000 (after 50% discount), CGT of $35,150
Shares bought at $50,000, sold at $80,000, held under 12 months, 32.5% rate
Full $30,000 gain is taxable, CGT of $9,750 with no discount
When people use it
- Planning the tax impact of selling an investment property
- Timing share sales to qualify for the 50% CGT discount
- Calculating net profit after CGT on asset disposals
- Tax planning for financial year-end capital gains management
Tips
- Hold assets for at least 12 months to qualify for the 50% CGT discount where possible
- Capital losses can be offset against capital gains in the same or future financial years
- Keep records of all capital improvements as they increase your cost base and reduce your gain
- Consider the timing of sales to manage your taxable income and marginal tax rate
Questions people ask
- Does CGT apply to my main residence?
- Generally no. Your principal place of residence is exempt from CGT under the main residence exemption. However, if you have used the property to produce income (such as renting out a room or using it for business), a partial CGT liability may apply.
- How does the 50% CGT discount work?
- If you are an individual or trust and have held an asset for more than 12 months before selling, you only include 50% of the capital gain in your taxable income. Companies are not eligible for this discount.
- Can I offset capital losses against other income?
- No. Capital losses can only be offset against capital gains, not against other income like salary or wages. However, unused capital losses can be carried forward indefinitely to offset future capital gains.