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CAPITAL GAINS TAX ON PROPERTY

Know your capital gains tax before you sign.

CGT on property is decided on contract date, not settlement. We model the tax on your sale before you commit, including the 50% discount, the main residence exemption, the six-year absence rule and every cost that should be in your cost base.

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Fixed-fee CGT modelling Registered Tax Agent Before-sale advice
WHERE IT GOES WRONG

Where property CGT costs people money.

01

The cost base is incomplete.

Stamp duty, legal fees, capital improvements and selling costs all reduce your gain. Missing receipts from ten years ago are the most common reason investors overpay.

02

The main residence rules are misunderstood.

Moved out and rented your home? The six-year absence rule may keep it tax-free — but only if you apply it properly and don't treat another property as your main residence at the same time.

03

The timing is wrong.

Sign one day short of 12 months and you lose the 50% discount. Sell in a high-income year and more of the gain is taxed at the top rate.

We model it before you sign. Have a yarn with us — no charge.

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WHAT YOU GET

Our property CGT service.

A written calculation of your capital gain and the tax on it — before you sell, not after.

Cost base reconstruction

Purchase price, stamp duty, legal and conveyancing costs, capital improvements and selling costs — rebuilt from your records.

Capital works adjustment

Division 43 capital works deductions you've claimed reduce your cost base. We track them so your gain is right.

50% CGT discount check

Individuals and trusts that hold an asset for at least 12 months can generally discount the gain by half. We confirm eligibility and dates.

Main residence & six-year rule

Full or partial main residence exemption, the absence rule and the 'first used to produce income' market value rule, modelled for your history.

Sale timing scenarios

What the tax looks like if you sell this financial year or next, and how your other income changes the answer.

Return & clearance certificate

The capital gain reported in your tax return, and the ATO clearance certificate every seller now needs.

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PROPERTY CGT IN PLAIN ENGLISH

How is capital gains tax on property worked out?

Your capital gain is roughly what you sell for, less your cost base. The cost base includes the purchase price, stamp duty, legal costs, capital improvements and the costs of selling. For property bought after 13 May 1997, it's reduced by capital works deductions you've claimed.

The gain isn't taxed at a special rate. It's added to your taxable income for the year and taxed at your marginal rate.

The 50% CGT discount

If you're an Australian resident individual, or a trust, and you've owned the property for at least 12 months, you can generally reduce the gain by 50% after applying any capital losses. Companies don't get the discount. SMSFs get a one-third discount.

The 12 months is counted from when you acquired the property to when the CGT event happens — which for a sale is usually the date you sign the contract.

Main residence exemption and the six-year rule

Your home is generally exempt from CGT. If you move out and rent it, you can keep treating it as your main residence for up to six years at a time, as long as you don't nominate another property as your main residence for the same period.

Foreign residents at the time of sale generally can't use the main residence exemption, apart from limited life-events exceptions. They also lose the 50% discount for periods after 8 May 2012.

Sources & law referenced

Last reviewed September 2026. Tax law changes often — we check the current position before advising on your situation.

General information only. This page is general in nature and isn't personal tax, financial or legal advice. Speak to a registered tax agent about your own circumstances before acting.

FAQ

Capital gains tax on property — common questions.

When do I pay capital gains tax on a property sale?

The gain is included in your tax return for the financial year you signed the sale contract — not the year it settled. The tax is then payable when your assessment for that year is due.

How can I reduce capital gains tax on an investment property?

Legitimately: hold for at least 12 months for the 50% discount, make sure your cost base includes every eligible cost, use capital losses, consider which financial year you sign in, and check whether any main residence exemption applies. We model the options before you sell.

Do I pay CGT if I rented out my home?

Possibly not. Under the six-year absence rule, you can generally keep treating your former home as your main residence for up to six years while it's rented, provided you don't claim another main residence for the same time. After six years, or if you had other gaps, a partial exemption may apply.

Is stamp duty part of the cost base?

Yes. Stamp duty on purchase is generally included in the cost base, along with legal and conveyancing costs and other incidental costs of buying and selling.

Do Australian residents need a clearance certificate when selling?

Yes. Since 1 January 2025 foreign resident capital gains withholding applies to all property sales regardless of price. If you're an Australian resident you need an ATO clearance certificate before settlement, or the buyer must withhold 15% of the price.

How much does CGT modelling cost?

It's quoted as a fixed fee before we start, based on how many properties and how complex the history is. Call us and we'll give you the number on the phone.

Related services

Rental property tax returns Depreciation schedules Land tax planning SMSF property Foreign resident CGT

Where we work

Hills District & Norwest Central Coast NSW Sydney CBD
LET'S TALK

Selling soon? Talk to us first.

15 minutes on the phone. We'll tell you what needs checking before you sign — and what it'll cost to model it properly.

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