🇦🇺 Australia Capital Gains Tax Guide
Australia assesses Capital Gains Tax (CGT) as part of your income tax. However, holding assets for more than 12 months grants a significant discount.
How Capital Gains Tax Works in Australia
Your net capital gain is added to your assessable income. If you are an Australian resident and hold the asset for > 12 months, you can reduce the gain by 50% using the CGT Discount method.
•Short Term (< 12 months): 100% of gain taxed at marginal rate
•Long Term (> 12 months): 50% Discount (only half is taxed)
•Marginal Rate: Up to 45% + 2% Medicare Levy
•Capital Losses: Can offset capital gains but cannot be deducted from ordinary income
Example: Capital Gains Tax in Australia
Scenario
You bought CBA shares and sold them for a $10,000 profit. Marginal rate is 37%.
Profit$10,000
Scenario A: Held < 12 MonthsTax on $10k = $3,700
Scenario B: Held > 12 MonthsDiscount 50%. Tax on $5k = $1,850
Savings$1,850
By holding for over 12 months, you effectively halve your tax bill.
Australian CGT Strategies
12-Month Rule
Always aim to hold assets for at least 12 months + 1 day to qualify for the 50% CGT discount.
Superannuation
Investments inside Super accumulation phase are taxed at max 15%, and effectively 10% for capital gains (1/3 discount).
Loss Harvesting
Realize losses in the same financial year you have large gains to offset the tax liability.
Tax Optimization Tools
Calculate Tax for Popular Stocks
Disclaimer: This is general information only, not tax advice. Tax laws change frequently and vary by individual circumstances. Consult a qualified tax professional in Australia for your specific situation.
