Capital gains tax (CGT) in Australia is not a separate flat tax rate; your capital gain is added to your taxable income and then taxed at your marginal income tax rate, with possible discounts and exemptions applying.

Key takeaways

  • CGT applies when you dispose of a ā€œCGT assetā€ such as shares, crypto, investment property, certain collectibles, and business assets. Your main home is usually exempt.
  • You pay tax on your net capital gain:
    • Total capital gains
    • minus capital losses
    • minus any CGT discount or smallā€‘business concessions you qualify for.
  • The resulting net capital gain is then taxed at your personal income tax rates for that year (there is no special CGT rate table for individuals).

So ā€œhow muchā€ is CGT?

For an Australian resident individual in 2025ā€“26, the practical CGT ā€œrateā€ is:

  • If you held the asset 12 months or more and qualify for the CGT discount, generally only 50% of the gain is included in your taxable income (33.33% for complying super funds; no discount for companies).
  • That discounted amount is taxed using the standard personal tax brackets (for example, 0%, 16%, 30%, 37%, 45% in 2025ā€“26 according to recent budget/tax updates).
  • If you held the asset less than 12 months , no discount applies, so 100% of the gain is included and taxed at your marginal rate.

In practice, your effective CGT rate depends on:

  • Your total taxable income for the year (including salary, rent, interest, etc.).
  • Whether the asset was held at least 12 months so you can use the 50% discount.
  • Whether you have capital losses to offset the gain first.

Simple example

  • Assume you are an Australian resident and make a $20,000 capital gain on shares you held for more than 12 months, with no other capital gains or losses.
  • You can apply the 50% discount, so only $10,000 is added to your taxable income.
  • The actual tax you pay on that $10,000 depends on which income bracket you fall into (for example, someone already in the 30% bracket would pay roughly $3,000 extra tax on that gain).

Other important points

  • Main residence exemption : Your primary home is generally exempt from CGT if it meets conditions (for example, it was your main residence the whole time and not used to produce income beyond certain limits).
  • Foreign residents : They are usually only subject to CGT on Australian taxable property (like Australian real estate), and do not generally get the 50% discount on gains accrued after 8 May 2012.
  • Small business concessions : If you sell an active business asset and meet the tests, there are extra concessions such as 50% active asset reduction, retirement exemption and rollover that can greatly reduce or eliminate CGT.

Quick HTML table of the concept

html

<table>
  <thead>
    <tr>
      <th>Aspect</th>
      <th>How CGT works in Australia</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>Is there a flat CGT rate?</td>
      <td>No. Net capital gains are added to taxable income and taxed at marginal income tax rates.</td>
    </tr>
    <tr>
      <td>Standard individual discount</td>
      <td>50% discount if asset held ā‰„ 12 months and other conditions are met.</td>
    </tr>
    <tr>
      <td>Short-term gains (&lt; 12 months)</td>
      <td>No discount; 100% of gain included in taxable income.</td>
    </tr>
    <tr>
      <td>Super funds</td>
      <td>Generally 33.33% CGT discount for complying funds on assets held ā‰„ 12 months.</td>
    </tr>
    <tr>
      <td>Companies</td>
      <td>No CGT discount; gains taxed as part of normal company income.</td>
    </tr>
    <tr>
      <td>Main residence</td>
      <td>Usually exempt from CGT if conditions for main residence exemption are met.</td>
    </tr>
    <tr>
      <td>Foreign residents</td>
      <td>Generally taxed only on Australian taxable property; limited or no access to the 50% discount for postā€‘2012 gains.</td>
    </tr>
  </tbody>
</table>

Quick reminder

CGT is very situationā€‘specific, and the effective rate can change a lot depending on your income level, how long you have held the asset, and whether you have losses or special concessions available. For decisions involving large gains (for example selling an investment property), getting personalised tax advice is strongly recommended.

Information gathered from public forums or data available on the internet and portrayed here.