What goes in a property’s cost base
The ATO splits the cost base into five elements. For property they usually include:
| Element | Typical property costs |
|---|---|
| 1. Acquisition cost | Purchase price (contract price) |
| 2. Incidental costs | Stamp duty, conveyancing and legal fees, buyer’s agent, building & pest inspection, valuation; on sale – agent’s commission, advertising, legal fees |
| 3. Costs of ownership | Interest, rates, land tax, insurance and repairs – only if not deductible (e.g. vacant land or a holiday home never rented) |
| 4. Capital improvements | Renovations, extensions, landscaping and other capital costs that increase or preserve the property’s value (not repairs you claimed) |
| 5. Title costs | Costs of establishing, preserving or defending your title (e.g. legal costs to defend a boundary claim) |
Capital works deductions reduce the cost base. If you claimed Division 43 deductions (2.5% or 4% a year on construction costs), subtract them. Depreciation on plant and equipment (Division 40) is dealt with through balancing adjustments instead. Full cost base guide.
Worked example
Investment property sold in 2025–26
Bought August 2017 for $720,000; stamp duty, legal and inspection costs $31,700; $40,000 kitchen and bathroom renovation; $6,200 capital works deductions claimed. Sold under a June 2026 contract for $1,150,000; agent, legal and marketing costs $27,100. Other taxable income $110,000.
- Cost base: $720,000 + $31,700 + $27,100 + $40,000 − $6,200 = $812,600
- Capital gain: $337,400; after the 50% discount: $168,700
- Estimated tax: $71,139 (21.1% of the gain)
- If the property were owned 50/50 and each owner earned $110,000, each would pay about $31,495 – $62,989 combined, because each half of the gain is taxed in a lower bracket.
If the property was your home
Your main residence is exempt from CGT. If it was only your home for part of the time, a partial exemption applies: the taxable portion is the number of days it was used to produce income divided by the total days you owned it (counting both contract dates). Select “Partly” and enter the non-main-residence days.
- Moved out and rented it? Under the 6-year rule you can keep it fully exempt for up to 6 years of absence, provided you don’t claim another home at the same time. Only count days beyond that period.
- Lived in it first, then rented it (after 20 August 1996)? Tick “It was my home first…”. The ATO treats you as having bought it at its market value on the day it was first rented, and the 12-month discount period restarts from that day.
- Rented it first, then moved in? The market value rule doesn’t apply – use “Partly” with the days it was rented.
Foreign residents
Foreign residents generally can’t claim the main residence exemption (unless they meet the life events test), and don’t get the 50% discount for periods after 8 May 2012. Buyers must withhold 15% of the price under the foreign resident capital gains withholding rules for contracts from 1 January 2025 – Australian resident sellers need a clearance certificate to avoid it. Foreign resident CGT guide.
Selling in NSW or Queensland?
CGT is a federal tax and works the same in every state, but state stamp duty and land tax affect your cost base. See CGT in NSW and CGT in Queensland.
Frequently asked questions
How do I calculate CGT on an investment property?
Take the sale price, subtract the cost base (purchase price, stamp duty, legal fees, buyer’s and seller’s agent costs, capital improvements, less capital works deductions you claimed), then apply the 50% discount if you owned it for at least 12 months. Add the result to your taxable income for the year you signed the sale contract.
Is stamp duty included in the cost base?
Yes. Stamp (transfer) duty paid to buy the property is an incidental cost and forms part of the cost base. Stamp duty on a lease or other deductible amounts is treated differently.
Can I include interest, rates and insurance?
Only if you could not claim them as deductions. For a rental property they are deductible, so they are not added to the cost base. For vacant land or a holiday home that was never rented, non-deductible holding costs (third element) can be included for assets acquired after 20 August 1991.
What is the 6-year rule?
If you move out of your home and rent it, you can keep treating it as your main residence for up to 6 years (each period of absence), as long as you don’t treat another property as your main residence at the same time. More on the 6-year rule.
How is CGT calculated on jointly owned property?
Each owner calculates CGT on their own share. Joint tenants usually own equal shares. Enter the full price and costs in the calculator and set “Your ownership share” to your percentage.
Do I need a valuation at 30 June 2027?
For property you own on 1 July 2027 and sell later, the gain is split at that date. You can use a market valuation, or Treasury’s apportionment method (still in draft) which estimates the 30 June 2027 value by assuming steady growth. The calculator supports both.
References
Every figure on this page was checked against these primary sources on 16 October 2026.
- ATO – How to calculate your CGT
- ATO – Cost base of assets
- ATO – Cost base adjustments for capital works
- ATO – Using your home for rental or business
- ATO – Treating former home as main residence (6-year rule)
- ATO – Your main residence (home)
- ATO – Main residence exemption for foreign residents
- ATO – Foreign resident capital gains withholding
- ATO – CGT discount
- ATO – Capital gains tax reform (published 13 Oct 2026)
- Treasury – Draft apportionment method (exposure draft explanatory statement, Aug 2026)
General information only – not financial or tax advice. See our disclaimer. Spotted an error? Email hello@cgtcalculatoraustralia.com.