Understanding CGT in Australia

Capital Gains Tax (CGT) is the tax you pay on the profit made when you sell certain assets. It’s not a separate tax — it’s part of your income tax.

CGT applies to:

  • Investment properties
  • Shares and managed funds
  • Cryptocurrency
  • Business assets

For example, if you buy shares for $5,000 and sell them for $5,500, the $500 profit is a capital gain. You’ll pay tax on that gain at your individual income tax rate.

Important notes:

  • Your family home is generally exempt from CGT.
  • If you make a capital loss, you can offset it against future gains.
  • Holding an asset for over 12 months may qualify you for a 50% discount on the gain.

Understanding CGT is crucial for investors and property owners. Speak to your broker or tax adviser to plan ahead and avoid surprises at tax time.