The first thing to know about capital gains tax in Australia: there is no separate CGT rate. When you sell an asset for more than it cost you, the gain is added to your taxable income for that year and taxed at your marginal rate. Your "CGT rate" is just your income tax rate, which is why selling in a lower-income year can cost you far less.
Is there a fixed capital gains tax rate?
No. Because the net gain is added to your taxable income, the rate you pay is your marginal tax rate for the year, which rises with your total income and includes the Medicare levy. Two people can pay very different tax on the same gain depending on what else they earned.
There is no separate CGT rate. It is your income tax rate, applied to the gain.
The 50% discount changes the effective rate on a long-term gain. Held more than 12 months, only half the gain is taxed, so the tax works out to roughly half your marginal rate on the actual gain. Held under 12 months, the whole gain is taxed at your marginal rate. Because the brackets change from year to year, and the CGT rules are currently under review, read the current figures off the ATO before relying on a number, or use the calculator below.
How a capital gain is worked out
Your capital gain is the proceeds minus the cost base. 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 simple CGT levers there is.
The whole gain is taxed at your marginal rate. No discount applies, however long you were planning to hold.
Only half the gain is added to your taxable income. The discount is applied after any capital losses are subtracted, not before.
Order matters: 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% plus the 2% Medicare levy, 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, so the family home usually isn't subject to CGT. Cars and most personal-use assets are exempt too.
- Investment properties. Any property that isn't your main residence is a CGT asset.
- Shares and ETFs. Every sale is a CGT event, whatever the size of the trade.
- Crypto. Yes, crypto is a CGT asset, and every disposal, including swapping one coin for another, is a CGT event.
Legitimate ways to reduce CGT
- Hold past 12 months to qualify for the 50% discount.
- Realise losses in the same year to offset gains, mindful of the ATO's "wash sale" rules if you buy straight back in.
- Time the sale for a year when your income, and your marginal rate, is lower.
- Super contributions can lower your taxable income in the year of a big gain.
Enter your income and the buy/sell prices for an instant 2026-27 CGT estimate, with the discount applied.
General information only, not tax advice. The rules have exceptions, so check the ATO or a registered tax agent for your situation.