Menu
PropertySharesCryptoRatesGuides2027 changesCalculate CGT

Guide · Australian CGT

How to calculate capital gains tax in Australia

Determining your capital gains tax takes eight steps. Here is the ATO’s method, the formula, and worked examples you can check against our calculator.

Reviewed 16 October 2026Sources: ATO, Treasury, Parliament

The 8 steps (ATO method)

  1. Work out your capital proceeds – what you received for the asset. If you gave it away or sold it to an associate for less than it was worth, use its market value.
  2. Work out your cost base – the purchase price plus the costs of buying, holding (if non-deductible) and selling it, and capital improvements. If you made a loss, use the reduced cost base. Cost base guide.
  3. Subtract the cost base from the proceeds. A positive result is a capital gain; a negative result (using the reduced cost base) is a capital loss.
  4. Repeat for every CGT event in the financial year.
  5. Subtract capital losses – current-year losses first, then net capital losses carried forward from earlier years. Apply them to gains that don’t qualify for the discount first. Capital losses guide.
  6. Check if you have a net capital gain or a net capital loss. A net loss is carried forward; it can’t reduce your other income.
  7. Apply the CGT discount to remaining eligible gains – 50% for resident individuals and trusts who owned the asset for at least 12 months, 33⅓% for complying super funds, nothing for companies. Discount rules.
  8. Report the net capital gain in your tax return. It is taxed at your marginal rate with the rest of your income.

If you acquired the asset before 21 September 1999 you may index the cost base for inflation up to 30 September 1999 instead of using the discount – whichever gives the lower gain. The calculator tests both automatically.

The formula

Capital gain = capital proceeds − cost base Net capital gain = (total capital gains − capital losses) × (1 − discount %) Tax on the gain = tax on (other taxable income + net capital gain) − tax on (other taxable income)

Worked example: an investment property

Based on the ATO’s “Rhi” example

Rhi buys an investment property for $500,000 (stamp duty $15,000, conveyancing $1,200) and sells it five years later for $600,000 (conveyancing $1,300, agent’s commission $12,500).

  1. Capital proceeds: $600,000
  2. Cost base: $500,000 + $15,000 + $1,200 + $1,300 + $12,500 = $530,000
  3. Capital gain: $600,000 − $530,000 = $70,000
  4. No other gains or losses
  5. 50% discount (held 5 years): $35,000
  6. Net capital gain: $35,000

The ATO example stops at the net capital gain. If Rhi’s other taxable income were $100,000 and the contract was signed in 2025–26, our calculator estimates the extra tax at $11,200 (including Medicare levy).

Several assets and capital losses

Rhi also sells shares at a loss

In the same year Rhi sells shares that cost $10,000 (including brokerage) for $5,500 – a capital loss of $4,500.

  • Gains $70,000 − losses $4,500 = $65,500
  • 50% discount → net capital gain $32,750
  • Estimated tax with $100,000 other income: $10,480 – saving $720 compared with selling the property alone.

Working out the tax

CGT isn’t a separate tax. The fairest way to see what a gain costs you is the difference between your tax with and without it. That’s what our calculator does, using the ATO rate scale for the year your contract was signed, the low income tax offset and the Medicare levy. See CGT rates for tables.

Sales after 1 July 2027

From 1 July 2027 the steps change for resident individuals, trusts and partnerships. Assets held on that date are treated as sold and reacquired at their 30 June 2027 value. The gain up to then uses steps 1–8 above (including the 50% discount). The gain after then uses a CPI-indexed cost base with no discount, and individuals pay a top-up if their tax on that gain is less than 30%. Step-by-step 2027 method.

Frequently asked questions

What is the formula for capital gains tax in Australia?

Net capital gain = (capital proceeds − cost base) − capital losses − CGT discount. Tax = tax on (taxable income + net capital gain) − tax on taxable income.

Do I use the sale date or settlement date?

The contract date. For a property sale, the CGT event happens when you sign (exchange) the contract, so a contract signed on 25 June 2026 that settles in August 2026 belongs in your 2025–26 return.

Do I apply losses before or after the discount?

Before. Subtract capital losses from your capital gains first – ideally from gains that don’t qualify for the discount – and then apply the discount to what remains.

How do I calculate CGT on a property I lived in and rented?

Work out the full gain, then multiply by the proportion of days the property wasn’t your main residence (after any 6-year rule period). If you lived in it first and rented it after 20 August 1996, use its market value when first rented as your cost. Use the property calculator.

Can I calculate CGT myself or do I need an accountant?

Many people can work it out with good records and a calculator like ours. Get professional advice for complex situations: business assets and small business concessions, inherited property, trusts, residency changes, or large gains under the 2027 transitional rules.

References

Every figure on this page was checked against these primary sources on 16 October 2026.

  1. ATO – How to calculate your CGT
  2. ATO – Cost base of assets
  3. ATO – Using capital losses to reduce capital gains
  4. ATO – CGT discount
  5. ATO – Indexing the cost base
  6. ATO – Tax rates: Australian residents
  7. ATO – Capital gains tax reform (published 13 Oct 2026)

General information only – not financial or tax advice. See our disclaimer. Spotted an error? Email hello@cgtcalculatoraustralia.com.