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Capital gains tax in Australia: the discount and 2027 change

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How it works now

There’s no separate capital gains tax: a net capital gain is added to your taxable income for the year you sell. Your gain is what you sold for, less your cost base: the price you paid plus costs such as brokerage, stamp duty and legal fees.

If you’ve held the asset for more than 12 months, individuals and trusts get a 50% discount, so only half the gain is taxed.

Example: a $10,000 gain on shares held for 2 years adds $5,000 to your income. At a 32% rate (30% plus the Medicare levy), that’s $1,600 of tax. Sold within a year, the whole $10,000 would be taxed: $3,200.

Tax on a $10,000 gain By your tax rate, 2026–27, including the 2% Medicare levy
15% tax rate (17% with the levy) $850 less
Held 12 months or less: $1,700 Held more than 12 months: $850
30% tax rate (32% with the levy) $1,600 less
Held 12 months or less: $3,200 Held more than 12 months: $1,600
37% tax rate (39% with the levy) $1,950 less
Held 12 months or less: $3,900 Held more than 12 months: $1,950
45% tax rate (47% with the levy) $2,350 less
Held 12 months or less: $4,700 Held more than 12 months: $2,350

Holding for more than 12 months halves the tax at every rate

Assumes the whole gain falls in one tax bracket. A large gain can push part of it into a higher one.

No tax is taken out when you sell, so it’s added to your bill when you lodge your tax return. Set some of the gain aside.

What it applies to

  • Shares, ETFs and managed funds, including gains a fund passes on to you.
  • Crypto, including swapping one coin for another.
  • Investment property and holiday homes.

Your car, and personal items you bought for $10,000 or less, are usually exempt. Keep records of what you paid and any costs for 5 years after you sell.

The change announced for 2027

The May 2026 Budget announced that from 1 July 2027:

  • The 50% discount is replaced by indexation: the cost of the asset rises with inflation, so only the real gain is taxed.
  • A 30% minimum tax applies to net capital gains.
  • Gains made before 1 July 2027 keep the 50% discount.
  • Negative gearing on established homes bought after Budget night (12 May 2026) can only be used against residential property income and gains.

Check the ATO’s site for whether these changes have become law, and the final details.

Losses

Capital losses can only be set against capital gains, not other income such as your salary. They come off your gains before the 50% discount is applied, and unused losses carry forward to future years.

Your home

Your main residence is usually exempt. If you rented it out or used it for business, part of the gain may be taxable. If you move out and rent it, you can usually keep treating it as your main residence for up to 6 years, as long as you don’t claim another home as your main residence.

Super

Gains inside super are taxed at up to 15%, or 10% on assets held over a year, and nothing in the retirement phase. See where to invest for how investing in super compares with investing outside it.

Frequently asked questions

How much capital gains tax will I pay?

There’s no separate rate. Your net capital gain is added to your taxable income and taxed at your marginal rate, plus the 2% Medicare levy. If you held the asset for more than 12 months, only half the gain is taxed: on a $10,000 gain at a 30% tax rate, that’s $1,600.

Do I pay capital gains tax when I sell my home?

Usually not, if it was your main residence the whole time you owned it. If you rented it out or used part of it for business, part of the gain may be taxed. If you move out, you can usually keep treating it as your main residence for up to 6 years while it’s rented.

Do I pay capital gains tax on crypto?

Usually yes. Selling crypto, swapping it for another coin or using it to pay for things can each make a capital gain or loss, worked out in the same way as for shares.

Can a capital loss reduce the tax on my salary?

No. Capital losses can only be taken off capital gains. If you have more losses than gains in a year, the rest carries forward to use against gains in later years.

How is the 12 months counted?

From the date you bought to the date you sold, which for property and shares is usually the contract or trade date, not settlement. You need to have owned it for at least 12 months, not counting those two days.

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