How to Calculate Capital Gains Tax in Australia

By GrowThenDraw Editorial Team · Updated August 2, 2026 · 11 min read · Editorial policy

Capital gains tax is not a separate flat tax. For an Australian-resident individual, the net capital gain is generally added to taxable income and taxed through the ordinary resident income-tax brackets.

The difficult parts usually happen before the tax brackets: choosing the correct CGT-event date, building a defensible cost base, applying capital losses in the right order and checking whether the ordinary individual discount is available.

The calculation in seven steps

Keeping those steps separate produces an audit trail. It also prevents two common errors: treating the 50% discount as a 50% tax rate, or subtracting a mortgage balance from the capital gain.

• Identify the CGT event and its date.
• Work out your share of capital proceeds.
• Build the ordinary cost base from the five statutory categories.
• Subtract the cost base from proceeds to find the capital gain, or use the reduced cost base to test for a capital loss.
• Apply eligible current-year capital losses, then unapplied net capital losses from earlier years.
• Apply the CGT discount only after losses, if the taxpayer and asset qualify.
• Add the resulting net capital gain to other taxable income and calculate the incremental income tax.

Use the CGT-event date, not automatically settlement

For an ordinary property sale, the relevant date is commonly the contract date rather than settlement. Shares, crypto, compulsory acquisitions, gifts, deceased estates and rollovers can involve different CGT events or timing rules.

The event date determines the income year and is also used when testing the ordinary 12-month discount period. A tax estimate can be wrong even when every dollar input is right if the wrong date is used.

Build the cost base from five categories

The ordinary cost base is not just the purchase price. It can contain five elements: money or property given to acquire the asset; incidental acquisition or disposal costs; eligible ownership costs that were not deducted; capital expenditure that increases or preserves value; and capital expenditure to establish, preserve or defend title or rights.

Typical incidental costs can include eligible stamp duty, brokerage, conveyancing, legal fees, advertising and agent commission. Do not add an amount that has already been deducted or otherwise excluded. Keep invoices, contracts and working papers because the description on a bank statement may not prove the tax treatment.

The reduced cost base used to calculate a capital loss is not always the same. In the common case, ordinary third-element ownership costs are excluded. That means an amount can produce neither a capital gain nor a capital loss when proceeds sit between the ordinary and reduced cost bases.

Capital losses come before the discount

Apply eligible capital losses against capital gains before calculating the CGT discount. A loss is not normally deducted directly from salary or other ordinary income. Any unapplied net capital loss can generally be carried forward, subject to the rules that apply to the taxpayer.

Where several gains exist, the choice of which gain receives a loss can affect the final net capital gain because some gains may be discountable and others may not. The calculator models one ordinary event and asks for other current-year and earlier losses; a multi-asset tax return may need a broader optimisation.

Test a clear 12 months

The ordinary 50% individual discount generally requires at least 12 months between acquisition and the CGT event, with both event days excluded. The ATO example for an asset acquired on 2 February first allows the discount for an event on 3 February of the following year.

The holding period is only one test. Companies do not receive the individual discount, while trusts, super funds, non-residents, inherited assets, affordable housing and pre-1999 assets can require different treatment. An asset acquired on or before 21 September 1999 may also need a comparison with the frozen indexation method.

Worked 2026–27 example

Assume one Australian-resident individual owns 100% of an investment property. Capital proceeds are $800,000. Purchase price is $500,000, eligible buying costs are $25,000, capital improvements are $25,000 and selling costs are $15,000. The ordinary cost base is $565,000 and the gross capital gain is $235,000.

Apply $20,000 of other current-year capital losses, leaving $215,000. If the clear-12-month and other discount tests are satisfied, the 50% discount is $107,500, so $107,500 is added to other taxable income.

With $100,000 of other taxable income, the extra amount crosses the 30%, 37% and 45% resident brackets. Under the calculator's 2026–27 assumptions, the incremental income tax is $38,725. Adding a simple 2% Medicare-levy increment produces an estimated $40,875 attributable to the gain. Medicare thresholds, exemptions, surcharge, offsets and the rest of a tax return can change the final assessment.

Tax and sale cash are different answers

A loan secured against an asset does not reduce the capital gain merely because it must be repaid at settlement. It affects the cash left after sale. Keep the two calculations separate: tax uses proceeds, cost base, losses and tax rules; net sale cash subtracts selling costs, loan repayment and estimated tax from your share of proceeds.

The calculator therefore reports both estimated tax and net sale cash. It also keeps ownership share explicit so a jointly owned asset is not accidentally calculated as though one owner received all proceeds and paid all costs.

Current page scope and the legislated 2027 change

This calculator is deliberately limited to an ordinary 2026–27 event for an Australian-resident individual. It does not calculate main-residence exemptions, foreign-resident apportionment, small-business concessions, trust or company allocations, rollovers, inherited-asset rules, depreciation adjustments or the full Medicare system.

Legislation enacted in 2026 changes the individual CGT discount framework for gains accruing from 1 July 2027. Treasury describes an inflation-based method with a minimum 30% discount replacing the current 50% framework for affected future gains. The 2026–27 calculator does not project that future regime and warns when an entered event date falls outside its rule year.

Records to gather before relying on an estimate

Use the calculator as an auditable planning estimate, then reconcile the result to your records and the ATO instructions. A registered tax agent can check exceptions when the amount is material or the history is complicated.

• Purchase and sale contracts showing the relevant dates and parties.
• Settlement statements and evidence of capital proceeds.
• Invoices for stamp duty, brokerage, legal work, advertising and agent fees.
• Evidence for capital improvements and title-related expenditure.
• Tax returns or ATO records showing unapplied net capital losses.
• Ownership percentages and records of any change in ownership.
• Prior depreciation, deductions, insurance recoveries or other adjustments.