Capital gains tax, or CGT, applies when you sell a property that is not your main residence. You pay tax on the profit between purchase and sale, after deducting allowable costs. This is a general explainer only. Always confirm your situation with a qualified accountant before selling.
What is capital gains tax on property?
CGT is not a separate tax. It is income tax on your capital gain, added to your taxable income in the financial year the contract is signed. That is why timing a sale close to a financial year boundary can matter.
Is my home exempt from CGT?
Your main residence is generally exempt if you have lived in it as your home. Rules cover moving out, renting it out, extended absences and land size. The exemption is powerful but conditional.
Do investors pay CGT on every sale?
Yes, on any investment property that is not your main residence. If you have owned the property for more than 12 months as an Australian resident, you generally receive a 50 percent CGT discount on the gain.
How is the gain calculated?
Sale price, minus purchase price, minus buying costs, minus selling costs, minus qualifying improvements. Selling costs include agent commission, marketing, conveyancing and auctioneer fees. Keep every receipt and settlement statement.
Downsizers and CGT
If your home has been your main residence throughout, downsizing is typically CGT-free. Downsizer super contributions have their own rules, unrelated to CGT.
Deceased estates and CGT
Inherited main-residence properties often qualify for a CGT exemption if sold within two years. Investment properties inherited from a deceased estate are more complex.
Please talk to an accountant
CGT interacts with your income, marital status, ownership structure and history. A one-hour session with a property-savvy accountant before you sign a listing agreement is money well spent.
Once you have the tax picture, get a free AI appraisal at /ai-appraisal or book me at /appraisal to model the net-in-pocket result.
Frequently asked questions
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Written by
Junaid Ally
Ray White Rochedale agent. I've been selling homes across Brisbane's south side for more than 18 years and have helped over 1,000 local families through the process. I write about what I see on the ground each week — auctions, results, seller questions and the small things that make a real difference to a sale.
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