Calculator
CGT Calculator
CGT Calculator
Estimated Tax Payable
$4,000
Scenario Analysis
Because you held the asset for 13 months, you qualify for the 50% CGT discount. Only $12,500 of your profit will be added to your taxable income.
*Includes 2% Medicare Levy. Does not account for tax offsets, capital losses, or Medicare Levy Surcharge. Based on 2024-25 Individual tax rates.
A Guide to Capital Gains Tax in Australia
Capital Gains Tax (CGT) is the tax you pay on the profit (capital gain) made from the sale of an asset, such as shares, cryptocurrency, or investment property. In Australia, CGT is not a separate tax; instead, any net capital gain you make during a financial year is added to your taxable income and taxed at your marginal income tax rate. This means the amount of CGT you pay depends heavily on your other earnings for that year. If you sell an asset for more than what it cost you to acquire and maintain it, you have a capital gain. Conversely, if you sell it for less, you have a capital loss. Capital losses can be used to offset capital gains in the same financial year. If your total losses exceed your total gains, you can carry the net loss forward to offset against gains in future years, but you cannot use a capital loss to reduce your regular income from salary or wages. Understanding CGT is crucial for every Australian investor because it significantly impacts the 'net' return on your investments. Whether you're trading small amounts of Bitcoin or selling a long-held portfolio of ASX shares, the ATO expects a clear accounting of your gains. Most personal assets, like your primary residence (your home) and your car, are generally exempt from CGT, but almost all financial investments fall under the CGT umbrella.
How CGT is Calculated
The fundamental formula for CGT is: Capital Gain = Proceeds from Sale - Cost Base. The 'Cost Base' includes the original purchase price plus certain costs associated with acquiring, holding, and disposing of the asset, such as brokerage fees and stamp duty. One of the most important features of the Australian system is the 'CGT Discount.' If you are an individual and have held an asset for at least 12 months before selling, you are eligible for a 50% discount on the capital gain. This means only half of the profit is added to your taxable income, effectively halving the tax rate on that gain. Our calculator applies this discount automatically based on the holding period you provide. It also integrates the current 2024-25 Australian income tax brackets to estimate the actual tax payable. The process involves calculating the gross gain, applying any eligible discounts to find the 'net' gain, and then determining how much extra tax is triggered by adding that net gain on top of your existing income. For example, if you earn $100,000 a year and make a discounted capital gain of $10,000, the calculator will show you the tax on $110,000 versus the tax on $100,000. This provides a realistic view of the 'out of pocket' tax expense, which is essential for determining when it is most tax-effective to sell an investment.
Expert Insights
Timing is Everything
If you are close to the 12-month mark of holding an asset, waiting just a few extra days to sell can save you thousands in tax. The 50% CGT discount is one of the most powerful tax-saving tools available to regular Australians. Always check your purchase records before hitting the 'sell' button to ensure you aren't sacrificing half of your profit to the ATO unnecessarily.
Harvest Your Losses
Towards the end of the financial year (June), many savvy investors engage in 'tax-loss harvesting.' This involves selling underperforming assets that are currently in a loss position to offset gains made earlier in the year. This can bring your net capital gain down to zero, effectively eliminating your CGT liability for that year. Just be aware of 'wash sale' rules, where the ATO may disallow the loss if you buy the same asset back immediately.
The Main Residence Exemption
Your 'home' (the place you live in) is typically exempt from CGT. However, if you've used part of it for business or rented it out for a period, you may be liable for a partial capital gain when you sell. The '6-year rule' is a particularly useful provision that allows you to treat a property as your main residence for up to six years even after you've moved out and rented it, provided you don't claim another property as your main residence during that time.
Actionable Tips
- 1
Keep Impeccable Records
The ATO requires you to keep records for five years after you've sold an asset. This includes purchase receipts, brokerage statements, and records of any costs used to increase your cost base (like property renovations). Digital tools and portfolio trackers can automate this, ensuring you don't miss out on legitimate deductions that could lower your tax bill.
- 2
Consider Your Other Income
Because capital gains are added to your income, selling a large asset in a year where you have lower regular income (e.g., during a gap year or after retirement) can result in a much lower tax rate. If you have the flexibility, plan your 'exit' from a major investment for a year where your marginal tax rate is at its lowest.
- 3
Don't Forget the Cost Base
When calculating your gain, ensure you include every cent possible in your cost base. This isn't just the price you paid for the shares; it's the brokerage you paid to buy *and* the brokerage you'll pay to sell. For property, it includes stamp duty, legal fees, and even certain holding costs if the property wasn't producing income. A higher cost base means a lower taxable gain.
Real-World Examples
The Crypto Trader's Surprise
Alex bought $10,000 worth of Solana and sold it 4 months later for $25,000. Because he held it for less than 12 months, he owes tax on the full $15,000 gain. With a salary of $120,000, his marginal rate is 37%. Alex will have to pay approximately $5,550 in CGT. If he had waited until the 12-month mark, his taxable gain would have been just $7,500, saving him over $2,700 in tax.
Strategic Property Sale
Jan and Steve sell an investment property with a $200,000 profit after 5 years. Because they own it as individuals and held it over 12 months, the taxable gain is discounted to $100,000. By splitting the gain across two people ($50k each), they stay in lower tax brackets than if one person owned it solo, demonstrating the value of smart asset structuring.
Offsetting a Bad Investment
Mark made a $20,000 profit on 'Stock A' this year but is still holding 'Stock B' which is down by $15,000. By selling Stock B before June 30, he reduces his net capital gain to just $5,000. Instead of paying tax on $20,000, he only pays tax on $5,000, keeping more money in his pocket to reinvest in better opportunities.
Glossary of Terms
- Cost Base
- The total price paid for an asset plus any associated costs like brokerage, stamp duty, and legal fees.
- CGT Discount
- A 50% reduction in the taxable capital gain for assets held by individuals for more than 12 months.
- Capital Loss
- Occurs when you sell an asset for less than its cost base; can be used to offset current or future capital gains.
Frequently Asked Questions
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Ivy Sinclair-Wren
Financial Chaos Analyst
Ivy Sinclair-Wren is a Financial Chaos Analyst covering investing, AI, wealth psychology, and the emotional consequences of opening finance apps during market crashes. Based in Melbourne, she specializes in demystifying the Australian tax code and helping users navigate the intersection of spreadsheet logic and human irrationality.