What CGT means
When you dispose of an asset for more than it cost you, you make a capital gain. When it’s for less, you make a capital loss. Capital gains tax is the income tax on your net capital gain for the year: all your gains, minus your losses, minus any discount you’re entitled to.
CGT in Australia = your net capital gain added to your taxable income and taxed at your marginal rate, with half the gain usually tax-free if you held the asset for at least 12 months.
CGT events
The law lists more than 50 “CGT events”. The most common is A1 – disposing of an asset (selling it, gifting it or transferring it). Others include an asset being lost or destroyed, a company making a capital return, or entering a restrictive covenant. The timing usually follows the contract date, not settlement.
Which assets CGT applies to
- Investment properties, holiday homes, vacant land and business premises
- Shares, ETFs, units in managed funds and options
- Crypto assets
- Collectables (art, jewellery, antiques, coins) costing more than $500
- Personal use assets (boats, furniture) costing more than $10,000
- Business assets such as goodwill and intellectual property
- Contractual rights, leases and foreign currency
What’s exempt
- Your main residence (in most cases)
- Cars, motorcycles and similar vehicles
- Personal use assets acquired for $10,000 or less; collectables acquired for $500 or less
- Depreciating assets used solely for taxable purposes (balancing adjustment rules apply instead)
- Assets acquired before 20 September 1985 (for gains up to 30 June 2027)
- Compensation for personal injury, and some government payments
When you pay CGT
There’s no separate CGT payment. You report the gain in your tax return for the financial year in which the CGT event happened (the contract date for sales), and the tax is part of your assessment. If you’re in the PAYG instalment system a large gain may also affect your instalments. When you sell Australian real property, the buyer must withhold 15% of the price at settlement unless you give them an ATO clearance certificate (Australian residents can get one free online).
A short history
| Date | Change |
|---|---|
| 20 September 1985 | CGT introduced. Gains taxed using an inflation-indexed cost base. |
| 21 September 1999 | 50% discount introduced for individuals and trusts; indexation frozen at 30 September 1999. |
| 8 May 2012 | Discount removed for foreign and temporary residents (for later periods). |
| 9 May 2017 | Foreign residents lose the main residence exemption (with transitional rules to 30 June 2020). |
| 1 January 2025 | Foreign resident capital gains withholding increased to 15% with no threshold. |
| 26 June 2026 | Treasury Laws Amendment (Tax Reform No. 1) Act 2026 receives Royal Assent. |
| 1 July 2027 | Indexation returns in place of the 50% discount for gains accruing from this date; 30% minimum tax for individuals. |
Ready to work out your own? Use the CGT calculator or read how to calculate CGT.
Frequently asked questions
What does CGT mean?
CGT stands for capital gains tax – the income tax payable on a capital gain you make when a “CGT event” happens to an asset you own, most commonly selling it.
When did CGT start in Australia?
CGT applies to assets acquired on or after 20 September 1985. Assets acquired before that date (pre-CGT assets) are exempt for gains up to 30 June 2027, but gains accruing from 1 July 2027 will be taxable under the 2026 reforms.
Is CGT a separate tax?
No. Your net capital gain is included in your assessable income and taxed at your marginal rate in your annual tax return.
What assets are exempt from CGT?
Common exemptions include your main residence, cars and motorcycles, personal use assets bought for $10,000 or less, collectables bought for $500 or less, depreciating assets used only for taxable purposes, and compensation for personal injury.
References
Every figure on this page was checked against these primary sources on 16 October 2026.
General information only – not financial or tax advice. See our disclaimer. Spotted an error? Email [email protected].