Capital Gains Tax Calculator Australia: Sale of Property 2025-26
Calculate how much capital gains tax you'll pay when selling an Australian investment property. Includes the 50% CGT discount, cost base adjustments, depreciation clawback, and full marginal tax rate analysis.
How the capital gain stacks on top of your regular income and pushes through tax brackets.
How your CGT changes depending on when you sell. The 50% discount applies after 12 months of ownership. From 1 July 2027 the discount is replaced by CPI indexation and a 30% minimum tax — switch the Tax Rules toggle to New or Compare to see the treatment change by sale year.
| Sale Year | Holding | 50% Discount | Taxable Gain | CGT Payable | Effective Rate |
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Weigh your position before 1 July 2027From 1 July 2027 the 50% CGT discount is replaced by CPI indexation plus a 30% minimum tax. Growth after that date no longer gets the half-price discount, so for some owners it is worth modelling whether to sell (or lock in the pre-2027 growth via a 1 July 2027 valuation) before the change. It is not automatic: indexation can offset most of the lost discount on long holds, and selling triggers tax you might otherwise defer. Use the Tax Rules toggle above to compare on your own numbers, alongside your income that year and reinvestment plans.
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Hold for more than 12 monthsThe 50% CGT discount is one of the most powerful tax concessions available to Australian property investors, and it still applies to gains accruing before 1 July 2027. Selling even one day before the 12-month anniversary means you pay tax on the full capital gain instead of half.
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Maximise your cost baseKeep records of every legitimate cost: stamp duty, conveyancing, building inspections, capital improvements, loan establishment fees, and selling costs. A higher cost base means a lower taxable gain. Renovation receipts from years ago could save you thousands.
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Time the sale to a low-income yearSince CGT is added to your regular income, selling in a year when your other income is lower (e.g. career break, parental leave, transition to part-time) can result in significantly less tax. The difference between a 30% and 45% bracket on a $100K gain is $15,000.
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Offset gains with capital lossesCapital losses from shares, crypto, or other investments can be offset against your property capital gain. If you have unrealised losses elsewhere in your portfolio, consider crystallising them in the same financial year as the property sale.
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Consider ownership structureIf you purchased jointly with a spouse, each person reports their share of the gain separately. This can keep each person in a lower tax bracket. Future purchases may benefit from being structured via a trust or other entity, depending on your circumstances.
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Settlement date matters, not contract dateThe CGT event occurs on the date of the contract, not settlement. If you sign a contract on 28 June, the gain falls in the current financial year even if settlement is in August. Plan the contract signing date strategically around the end of financial year.
From 1 July 2027, two of the central tax settings for residential property investors change. The 50% CGT discount is replaced with an inflation-indexed cost base and a 30% minimum tax on the gain. Negative gearing on established residential property is restricted to other rental income, not salary or business income. The change applies to established properties contracted after 7.30pm AEST on 12 May 2026. New builds keep the existing concessions.
- 50% discount replaced with CPI-indexed cost base
- 30% minimum tax on the real (post-inflation) gain
- Income support recipients exempt from the 30% floor
- Pre-1 Jul 2027 growth keeps the 50% discount via apportionment
- New builds can elect the better of the old or new regime
- Applies to established residential bought after 7.30pm 12 May 2026
- Rental losses cannot offset salary or other personal income
- Quarantined losses carry forward, offset future rental income or capital gain on sale
- Properties contracted before 12 May 2026 are grandfathered indefinitely
- New builds keep full negative gearing against any income
How indexation works
Instead of halving the gain, the cost base is increased in line with CPI. If you bought for $500,000 and CPI runs at 2.5% per year for ten years, the indexed cost base becomes about $640,000. Only the gain above that indexed figure is taxable. The taxable amount is then taxed at the higher of your marginal rate or 30%, so investors who would otherwise pay below 30% on the gain lose ground, and investors at the top marginal rate are unaffected by the floor.
How the apportionment works
For an asset purchased before 1 July 2027 and sold after, the gain is split. Growth up to 30 June 2027 keeps the 50% discount. Growth from 1 July 2027 onwards is calculated under the new indexation regime with the 30% floor. The split uses either a market valuation at 1 July 2027 or an ATO apportionment formula. The ATO will publish the formula before the start date. This calculator uses a straight-line approximation as a stand-in.
Worked example
Established property bought for $500,000 in July 2024, sold for $850,000 in July 2034. Holding costs and depreciation set aside for the example. Investor on a $200,000 salary (47% marginal rate including Medicare, so the 30% floor is not in play). Indexation lifts the property's value at 1 July 2027 (about $605,000) by CPI over the seven post-2027 years.
| Step | Current rules | New rules |
|---|---|---|
| Gross capital gain | $350,000 | $350,000 |
| Pre-Jul 2027 portion (30%) | n/a | $105,000 |
| Post-Jul 2027 portion (70%) | n/a | $245,000 |
| Indexation uplift (2.5% CPI, 7 yrs on 1 Jul 2027 value) | n/a | $114,000 |
| Taxable gain (pre portion after 50% discount + post real gain) | $175,000 | $183,500 |
| CGT payable (47% bracket) | $82,250 | $86,250 |
| Extra tax under new rules | +$4,000 | |
The gap here is small because a ten-year hold earns a full decade of indexation, which offsets most of the lost discount. The new rules bite harder on shorter post-2027 holds (less indexation), higher-growth properties, and lower-income sellers, where losing the 50% discount and the 30% minimum tax both count. Model your own case with the Tax Rules toggle at the top.
What this means in practice
- Existing investors with contracts before 12 May 2026 keep the current rules. Nothing changes for already-owned property unless you choose to sell after 1 July 2027, in which case the post-2027 share of the gain falls under the new regime.
- New build investors retain the most flexibility: full negative gearing, plus the choice between the 50% discount and the indexation regime, picked at sale.
- The 30% minimum floor mostly hits investors below the top bracket. At the 47% marginal rate (including Medicare), the floor is irrelevant because marginal already exceeds 30%.
- Quarantined rental losses are not lost. They build up against future rental income and reduce the eventual capital gain at sale.
Strategy questions to think through
- Does selling before 30 June 2027 to lock in the full 50% discount make sense? Depends on the gain, your other income that year, and your reinvestment plan.
- Are you better placed in new builds (full concessions retained) than established stock going forward? Depends on the price premium new builds carry in your target market.
- How long do you plan to hold? The longer the post-2027 holding period, the more indexation closes the gap with the old 50% discount.
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Book a Free Discovery CallHow Is Capital Gains Tax Calculated on Property in Australia?
When you sell an Australian investment property for more than you paid, the profit is a capital gain and the ATO requires you to pay capital gains tax (CGT) on it. However, CGT is not a separate tax. It is added to your regular taxable income and taxed at your marginal tax rate. This is why understanding your tax brackets is essential when estimating CGT on the sale of rental property.
The calculation starts with your cost base: the original purchase price plus all acquisition costs (stamp duty, legal fees, inspections), any capital improvements made during ownership (renovations, extensions, structural work), and selling costs (agent commissions, marketing, legal fees for the sale). The difference between your sale proceeds and your cost base is your net capital gain.
Capital gains tax on property is calculated by subtracting your cost base (purchase price plus purchase costs, capital improvements, and selling costs) from your sale proceeds. If you've claimed depreciation, that amount is added back. If held for more than 12 months, you apply the 50% CGT discount. The resulting taxable capital gain is added to your other income and taxed at your marginal tax rate.
Australian resident individuals who hold an investment property for more than 12 months before selling are entitled to a 50% discount on their capital gain. This means only half of the net capital gain is added to your taxable income. The discount does not apply to companies, and different rules apply to trusts and super funds.
The cost base includes: the original purchase price, stamp duty, conveyancing and legal fees, building and pest inspection costs, capital improvements (renovations, extensions, structural repairs), and selling costs such as agent commissions, marketing fees, and legal costs associated with the sale.
Yes. If you've claimed depreciation deductions (Division 40 plant and equipment) on your investment property, the ATO requires you to add back (clawback) those amounts to your capital gain when you sell. This effectively increases your taxable capital gain by the total depreciation you've claimed over the ownership period.
Division 43 (building allowance) depreciation is generally not subject to clawback for properties purchased after May 1997. For more information on how tax deductions interact with investment property, see our guide on negative gearing changes in 2026.
Your taxable capital gain is added on top of your regular taxable income. This means the gain may push you into a higher tax bracket. For example, if your salary is $100,000 and you have a $60,000 taxable capital gain, the combined $160,000 is taxed at progressive rates, meaning different portions of the gain may be taxed at 30%, 37%, or even 45%.
Yes, there are several legal strategies: hold the property for more than 12 months to access the 50% discount, keep thorough records of all purchase costs and capital improvements to maximise your cost base, time the sale to a financial year where your other income is lower, offset capital gains against capital losses from other investments, and consider the timing of settlement relative to the end of the financial year.
Two changes take effect from 1 July 2027. The 50% CGT discount is replaced with an inflation-indexed cost base plus a 30% minimum tax on the gain. Negative gearing on established residential property contracted after 7.30pm AEST on 12 May 2026 is restricted: rental losses can only offset other rental income or the future capital gain on sale.
Properties contracted before 12 May 2026 are grandfathered and keep the existing rules. New builds keep both negative gearing against any income and the choice between the old 50% discount and the new indexation regime. Use the Tax Rules toggle at the top of this calculator to compare current vs new on your own numbers.
A new build is residential property that has not previously been sold or occupied as a residence, or that has been substantially renovated. The ATO uses similar criteria to its existing definition of new residential premises. New builds keep access to negative gearing against other income and the choice between the old 50% discount and the new indexation-plus-30%-floor regime, picked at sale.
Yes. Properties contracted before 7.30pm AEST on 12 May 2026 keep the current negative gearing and 50% CGT discount rules indefinitely. The new restrictions only apply to established residential properties contracted on or after that date. The CGT regime change itself still affects gains arising after 1 July 2027 for any asset, but pre-1 July 2027 growth keeps the 50% discount via the apportionment mechanism.
Instead of halving the gain, the cost base is increased in line with the Consumer Price Index. The taxable amount is the gain above that indexed cost base. The taxable amount is then taxed at the higher of your marginal rate or 30%. Investors at the top marginal bracket are unaffected by the 30% floor, since their marginal rate already exceeds it. Investors on lower brackets lose ground compared with the current 50% discount.
Yes. Losses that can no longer offset salary are not lost. They carry forward and can be applied against other rental income or against the future capital gain when the property is sold. The cash-flow benefit during ownership shifts, but the tax shield is preserved across the holding period.