How capital gains tax works in Australia
CGT isn't a separate tax — your net capital gain is added to your assessable income and taxed at your marginal rate. The trick to a smaller bill is timing, the 12-month discount, and offsetting against capital losses.
The CGT formula
Net gain = sale proceeds − cost base. Cost base includes the original purchase price, brokerage, legal and conveyancing fees, stamp duty (for property), and capital improvements. If you held the asset for more than 12 months as an individual, you halve the gain before adding it to income — that's the 50% CGT discount. SMSFs get a 33.33% discount; companies get none.
When the 12-month discount makes the biggest difference
A $50,000 gain on shares held 11 months adds the full $50,000 to your income — at a 37% marginal rate, that's $18,500 of tax. Hold the same shares one more month and you're taxed on $25,000, saving $9,250. The discount is the single biggest CGT lever for individuals.
What this calculator skips
- Capital losses — you can offset prior-year and same-year losses against gains.
- The main residence exemption — your principal place of residence is generally CGT-free.
- Cost-base adjustments (Division 110) for depreciable property.
- Medicare levy on the assessable portion.
Common CGT mistakes
Forgetting to add brokerage to the cost base, not keeping records for assets held a decade or more, selling parcels in the wrong order (first-in-first-out is the default, but specific identification can save tax), and selling just before the 12-month anniversary. Crypto sells, swaps and on-chain trades all trigger CGT in Australia — every transaction.