Capital Gains Tax (Australia) FAQ

CGT is not a separate tax — it is part of income tax. When you dispose of a CGT asset (sell, gift, or otherwise transfer it), any capital gain is included in your assessable income for that financial year and taxed at your marginal rate.

Most assets are CGT assets — real property, shares, units in trusts, cryptocurrency, goodwill, contractual rights, and personal use assets above $10,000. Key exclusions include cars and motorcycles, depreciating assets used solely for taxable purposes, and assets acquired before 20 September 1985.

Australian resident individuals, trusts, and complying super funds that hold a CGT asset for at least 12 months before disposal can reduce the capital gain by 50% (individuals and trusts) or 33.33% (super funds). Companies are not eligible for the discount.

Capital gain equals the capital proceeds (sale price) minus the cost base (purchase price plus incidental costs like stamp duty, legal fees, and capital improvements). If the cost base exceeds the proceeds, you have a capital loss.

Your main residence (the dwelling you live in) is generally exempt from CGT when you sell it. To qualify, the property must have been your main residence for the entire ownership period and must not have been used to produce income.

Yes. The absence concession allows you to treat a property as your main residence for up to 6 years while renting it out, provided you do not treat another property as your main residence during that period. If you do not rent it out, there is no time limit.

If you use part of your home exclusively for income-producing purposes (such as a dedicated home office or rental room), the main residence exemption is reduced proportionally. Incidental use like occasional work from the kitchen does not trigger apportionment.

Four concessions apply to small business entities (aggregated turnover under $2 million or net CGT assets under $6 million): the 15-year exemption, 50% active asset reduction, retirement exemption (lifetime $500,000 cap), and rollover into replacement assets.

If you have owned an active CGT asset continuously for 15 years and are 55 or over (or permanently incapacitated) at the time of the CGT event, the entire capital gain is disregarded. The asset must have been active for at least half the ownership period.

A rollover allows you to defer or disregard a capital gain when certain conditions are met — such as transferring assets to a company or trust, a marriage breakdown transfer, a scrip-for-scrip takeover, or a small business replacement asset rollover.

Capital losses can only offset capital gains — they cannot reduce other income. Unused capital losses carry forward indefinitely and must be applied before the 50% CGT discount is calculated. There are integrity rules preventing artificial loss creation.

Yes. The ATO treats cryptocurrency as a CGT asset. Disposing of crypto — selling, exchanging for another token, or using it to purchase goods — triggers a CGT event. The 50% discount applies if held for over 12 months. Personal use asset exemption may apply for holdings under $10,000 used for personal transactions.

Foreign residents are not entitled to the 50% CGT discount for gains accrued after 8 May 2012. They are also not eligible for the main residence exemption unless they satisfy the life events test. Foreign residents pay CGT on taxable Australian property including real property and mining rights.

Purchasers of Australian property must withhold 12.5% of the purchase price where the vendor does not provide a clearance certificate from the ATO, and the property value is $750,000 or more. Australian residents should apply for a clearance certificate before settlement.

There is no CGT event on death. The deceased's assets pass to the beneficiary or legal personal representative with a rollover of the cost base. CGT is triggered when the beneficiary later disposes of the asset, with special rules preserving the original acquisition date.

Assets transferred between spouses under a court order or binding financial agreement on marriage or relationship breakdown are rolled over — no CGT event occurs at the time of transfer. The receiving spouse inherits the original cost base.

Capital gains and losses are reported in your annual income tax return at the CGT schedule (label 18). The ATO receives data from share registries, land titles offices, and crypto exchanges, and pre-fills some CGT information in myTax.

You must keep records of acquisition cost, incidental costs, capital improvements, and disposal proceeds for 5 years after the CGT event (or 5 years after the asset is disposed of if held for longer). For the main residence, keep records for the entire ownership period plus 5 years.

No. Rental property losses (negative gearing) offset other income such as salary. Capital losses only offset capital gains. They are separate categories in the tax return and cannot be cross-applied.

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