Any asset acquired or purchased since the introduction of Capital Gains Tax on September 20, 1985, is subject to this tax. However, exceptions apply to certain personal-use assets, such as your family home or personal vehicle.
Home Calculators Capital Gains Tax Calculator
Selling your property? Depending on your taxable income you may have to pay Capital Gains Tax (CGT) on the sale. Calculate your capital gains tax estimate with our free calculator.
Based on your income $0, purchase price $0 and sold price $0, your estimated capital gains tax payable is $0.
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Capital gains tax (CGT) is the tax levied on the profits made from selling or disposing of assets, including investments like real estate, stocks, and cryptocurrencies. Despite being termed 'capital gains tax,' it is actually incorporated into your income tax, rather than being a separate tax.
When you dispose of an asset-meaning you no longer own it-a CGT event is triggered. At this point, you must report any capital gains or losses in your income tax return.
Here are the implications:
The CGT rate varies depending on the type of taxpayer and their circumstances.
For individuals, there is no specific CGT rate in Australia. Instead, capital gains are added to their assessable income and taxed at their marginal tax rate. This means that the amount of CGT an individual pays depends on their total taxable income for the year, which could place them in different tax brackets. It's also worth noting that individuals may be eligible for a 50% discount on capital gains if the asset was held for more than 12 months.
For trading companies, the CGT rate is determined by their annual turnover:
Self-managed super funds (SMSFs) are subject to a CGT rate of 15%. However, if the fund is in the pension phase, capital gains may be exempt from tax.
Investment companies that are not eligible for the 26% rate applicable to trading companies with turnovers below $50 million are taxed at a flat rate of 30%.
Calculating CGT on an investment property involves several steps and considerations. Here's a detailed guide to help you understand and potentially reduce the amount of CGT you may have to pay.
Determine the Cost Base: The cost base is the original purchase price of the property plus any associated costs, such as stamp duty, legal fees, and any capital improvements made to the property.
Calculate the Capital Proceeds: This is the amount you receive from the sale of the property.
Calculate the Capital Gain: Subtract the cost base from the capital proceeds. If the result is positive, you have a capital gain. If negative, you have a capital loss.
Apply CGT Discounts and Exemptions:
50% Discount for Individuals: If you've held the property for more than 12 months, you can reduce your capital gain by 50%.
60% Discount for Affordable Housing: If you invest in qualifying affordable housing, you may be eligible for a 60% CGT discount.
Some assets are exempt from CGT, including:
Suppose you bought an investment property for $500,000, including all associated costs. After 15 years, you sell it for $900,000. Your capital gain is:
Capital Gain = $900,000 − $500,000 = $400,000
If you've held the property for more than 12 months, you can apply the 50% discount:
Taxable Capital Gain = $400,000 × 0.5 = $200,000
This $200,000 will be added to your assessable income for the year and taxed at your marginal tax rate.
Our Capital Gains Tax Estimator provides an indication of the amount of capital gains tax you may be required to pay on an investment property. Under the Capital Gains Tax legislation which came into effect on the 30th of September, 1999, it is possible for an individual to calculate the CGT they will have to pay in one of two ways. We call these the "old" and "new" regimes.
The old regime, introduced in 1985, calculates CGT by indexing capital gains to take account of inflation during the period the asset was owned. To determine the amount of capital gains tax payable the indexed capital gain is then treated as income and the investors marginal tax rates apply.
The new regime, introduced on 30th of September, 1999 calculates CGT by applying the individual's marginal tax rate to half of the total capital gain. There are a large number of rules relating to capital gains tax, particularly concerning what are acceptable deductions. You should only include costs which can legitimately be deducted for taxation purposes.
A capital gain or loss represents the profit or loss you experience when selling an asset. This difference in capital is determined by comparing the purchase price of the asset to its selling price.
Any asset acquired or purchased since the introduction of Capital Gains Tax on September 20, 1985, is subject to this tax. However, exceptions apply to certain personal-use assets, such as your family home or personal vehicle.