How capital gains tax works in Australia
Australia does not use a separate flat capital gains tax like Ireland or France’s PFU. A capital gain is generally included in your assessable income and taxed at your marginal rate.
Individuals and some trusts can usually apply a 50% CGT discount if the asset was held more than 12 months. That means a top-rate individual can face an effective 22.5% tax on the discounted gain before Medicare levy effects, not a flat 45% on the whole gain.
The main residence exemption is one of the most valuable reliefs in the system. Foreign residents face tighter rules, and companies generally do not get the 50% discount.
Tax rates at a glance
- Inclusion method
- Marginal ratesCore rule
- Individual discount
- 50% after 12 months
- Effective top individual rate on discounted gain
- About 22.5% before levy
- Company treatment
- Generally no discount
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsProperty ownersFoundersExpatsFamily offices
Watch out for
- The 50% discount is not automatic for every taxpayer or every asset. Holding period, entity type and residency all matter.
- Crypto disposals, share sales and property sales can all create CGT events, including some non-obvious ones like swapping tokens or ending a relationship with an asset.
- Foreign residents have more limited access to main-residence relief and may face different outcomes on Australian real estate.
- Cost-base records decide the gain. Poor records are one of the most common expensive mistakes.
Frequently asked questions
Does Australia tax capital gains?
Yes. Capital gains are generally included in assessable income and taxed at marginal rates, often after a 50% discount for individuals who held the asset more than 12 months.
What is the capital gains tax rate in Australia?
There is no single flat CGT rate for individuals. The tax depends on your marginal rate and whether the 50% discount applies.
Is the family home taxed for CGT?
A qualifying main residence is often exempt, but partial exemptions, foreign-resident rules and use of the property for income can reduce or remove the relief.