How CGT Works
Australia doesn't have a separate capital gains tax rate. When you sell an asset for a profit, that profit (capital gain) is added to your taxable income and taxed at your marginal rate. If you earned $80,000 in salary and made a $20,000 capital gain, you're taxed as if you earned $100,000 (or $90,000 with the 50% discount).
The 50% CGT Discount
If you're an individual and you held the asset for more than 12 months before selling, you only include half the capital gain in your taxable income. This is the biggest tax break in the CGT system.
Example
You bought shares for $10,000 in January 2024 and sold them for $25,000 in March 2026. Your capital gain is $15,000. You held them for over 12 months, so you include $7,500 (half) in your taxable income. If you're in the 30% bracket, you pay $2,250 in CGT — not $4,500.
Your Main Residence Is Exempt
You don't pay CGT on your family home (your main residence) when you sell it, provided you've lived in it the whole time you owned it. This is the most valuable tax exemption most Australians will ever get.
Assets That Trigger CGT
Shares, investment properties, cryptocurrency, collectibles over $500, foreign currency, and business assets. Your main home, your car, and depreciating assets used solely for personal use are generally exempt.
Frequently Asked Questions
Do I pay CGT on my home?
Not if it's your main residence and you've lived in it the entire time you owned it. Investment properties and holiday homes are subject to CGT.
Do I pay CGT on cryptocurrency?
Yes. The ATO treats crypto as a CGT asset. You pay tax on profits when you sell, trade, or exchange crypto. The 50% discount applies if held over 12 months.
When is CGT calculated?
At the time you sell, gift, or otherwise dispose of the asset. Unrealised gains (the asset went up but you haven't sold it) don't attract CGT.
Can I offset capital losses?
Yes. Capital losses can offset capital gains in the same year, or be carried forward to future years. You can't claim them against your regular income.