Understanding CGT in Australia
When selling assets like shares, exchange-traded funds (ETFs), or investment properties in Australia, the profit is subject to Capital Gains Tax (CGT).
There is no separate capital gains tax rate. Instead, your taxable capital gains are added to your regular taxable income for the year, and taxed at your marginal rate.
The 12-Month 50% Discount Rule
If you are an individual and have held the asset for 12 months or longer before selling, you qualify for the 50% CGT discount.
Under this rule, only half (50%) of your capital gain is added to your taxable income, effectively cutting your CGT tax rate in half.
Action Plan: Plan Your Sale
- Verify Holding Dates: Double-check the exact dates of purchase and sale to ensure you cross the 12-month mark.
- Deduct Losses: Subtract any past carried-forward capital losses from your gain before applying the 50% discount.
- Calculate Liability: Use our Australian Capital Gains Tax (CGT) Discount Calculator to estimate CGT owed.
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