Capital gains tax is simple in principle and fiddly in practice. The principle: sale price less cost equals gain, and the gain is taxed. The practice: which costs count, whether the asset was ever your home, whether you were overseas, whether you inherited it, which entity owns it, which year the contract fell in, and from 1 July 2027, which part of the gain happened before the law changed.
Most of the money in CGT is in those details. That's the work we do.
When do you need a capital gains tax accountant?
Not every sale needs specialist advice. Here's our honest guide.
| Situation | Do you need advice? |
|---|---|
| Sold listed shares bought for cash, held over 12 months, with clean records | Probably not. Your tax return preparer can handle it |
| Shares bought through a dividend reinvestment plan over many years | Yes, the cost base is often wrong. Our dividend reinvestment agent rebuilds it parcel by parcel |
| Selling an investment property | Yes. Cost base, depreciation clawback, timing and the 2027 rules all matter |
| A home that was also rented out, or left vacant while you moved | Yes. Partial main residence exemption rules are complex |
| Inherited property or shares | Yes. The cost base and exemptions depend on when the deceased bought and how the asset was used |
| You are, or were, a foreign resident | Yes. Different rules, withholding and loss of exemptions |
| Selling a business or business premises | Yes. The small business CGT concessions can be worth a great deal |
| Transferring an asset to family, a trust, a company or your SMSF | Yes, before you do it |
| Crypto disposals | Usually. Every swap can be a CGT event; see our crypto tax guide |
How is capital gains tax calculated in Australia?
The basic sequence for an individual, as at 2026–27:
- Capital proceeds: usually the sale price.
- Less the cost base: what you paid, plus purchase costs (stamp duty, legal fees), capital improvements, sale costs and, for some assets, holding costs that weren't deducted. Capital works deductions you claimed on a rental property reduce the cost base.
- Equals the capital gain (or a capital loss).
- Less capital losses from this year and earlier years.
- Less the 50% CGT discount, if you held the asset for more than 12 months and you're an individual or trust (not a company).
- Less any small business concessions, if they apply.
- The net capital gain is added to your taxable income and taxed at your marginal rate.
A worked example
Example (hypothetical, rounded, contract signed before 30 June 2027): Say an investor bought a unit in 2015 for $600,000 and paid $30,000 in stamp duty and legal fees. He claimed $20,000 of capital works deductions over the years. He sells for $1,000,000 and pays $20,000 in agent's and legal fees.
| Step | Amount |
|---|---|
| Capital proceeds | $1,000,000 |
| Cost base: $600,000 + $30,000 + $20,000 sale costs − $20,000 capital works claimed | $630,000 |
| Capital gain | $370,000 |
| 50% CGT discount | ($185,000) |
| Net capital gain added to taxable income | $185,000 |
If the investor already earns $150,000, most of that $185,000 is taxed at the top marginal rate. If he sells in a year with little other income, more of it falls into lower brackets. That's often the cheapest planning available, but the contract date, not the settlement date, decides the year.
Who pays what on a capital gain?
| Owner | CGT discount | Rate on the gain |
|---|---|---|
| Individual (resident) | 50% for assets held over 12 months; replaced by indexation for growth from 1 July 2027 | Marginal rates, up to 45% plus Medicare levy; 30% minimum on certain post-2027 gains |
| Discretionary trust | Passes through to individual beneficiaries | Beneficiaries' rates |
| Company | None | 25% (base rate entity) or 30% |
| Super fund | One-third discount (unchanged by the 2027 reforms) | 15%, or nil in retirement phase |
What changes on 1 July 2027?
This is law. Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026:
- The 50% discount is replaced by indexation for individuals, trusts and partnerships, for growth that accrues from 1 July 2027. Your cost base rises with inflation instead.
- A 30% minimum tax applies to certain capital gains of resident individuals that accrue from 1 July 2027. Some people are outside it, including recipients of certain government support payments during the year, and deductible gifts reduce the gain it applies to.
- A snapshot at 30 June 2027. Assets you hold are treated as sold and reacquired at that point for this purpose. Growth to 30 June 2027 keeps the 50% discount and is outside the minimum tax, and no tax is payable until you actually sell. When you do, you can generally choose between the asset's actual market value at that date and an apportionment method the Minister is yet to set.
- Pre-CGT assets (bought before 20 September 1985) lose their exempt status for growth after 30 June 2027. Growth up to then stays tax-free.
- New residential dwellings (and affordable housing) keep a choice of the 50% discount. The definition of a new residential dwelling is still being finalised.
- Capital losses are applied first against older, discounted gains, which affects how you time sales of winners and losers.
So for anything you'll still own on 30 June 2027, the job is evidence: a reliable value at that date. For a valuable property or private company shares, that means a registered valuer. For listed shares, the closing prices. Our guides cover each part: CGT discount changes 2027, the 30% minimum tax and pre-CGT assets.
How does the main residence exemption work?
Your home is generally exempt from CGT if it was your main residence for the whole time you owned it and you didn't use it to earn income. The exemption gets partial, and the maths gets harder, when:
- You rented it out. If you move out, you can generally treat it as your main residence for up to six years while it's rented, as long as you don't claim another home as your main residence for the same period.
- It became a rental after you lived in it. If it was first used to earn income after 20 August 1996, the cost base can reset to market value at that time, which needs a valuation.
- You ran a business from it. Part of the exemption can be lost.
- The land is over two hectares, or you're moving between homes and own both for a while.
- You're a foreign resident when you sell. You generally can't claim the exemption at all unless you meet the life events test (a foreign residency period of six years or less and a specified event such as terminal illness, death or relationship breakdown).
Full detail is in our guide to the main residence exemption.
How are foreign residents taxed on capital gains?
Three rules matter most.
- Only taxable Australian property is taxed, mainly Australian real property and certain interests in entities that hold it. Check the ATO's current guidance on what counts before assuming an asset is outside the net.
- No CGT discount for any period you were a foreign resident; the discount is apportioned for the resident part.
- Withholding at settlement. For contracts from 1 January 2025, the buyer must withhold 15% of the price on any Australian real property, whatever its value, unless the seller provides an ATO clearance certificate. That means Australian residents need a clearance certificate too, or 15% of their sale price is withheld until they lodge. Apply early; it can take time.
If you're moving overseas, leaving Australia triggers its own CGT event for assets that aren't taxable Australian property. Our guide to tax residency when moving overseas covers the choice you make at that point.
How do historical valuations work?
The law uses a market value, rather than what you paid, in several situations: a home first rented out after 20 August 1996, some inherited assets, ceasing residency, family transfers and the 30 June 2027 snapshot. Often the date is years in the past.
Our historical property value agent produces an indicative estimate for a past date using official price indices and comparable sales, with the method set out so you can see how the figure was reached. It is an estimate, not a valuation. For larger amounts, or where the ATO is likely to look closely, we recommend a registered valuer and brief them on the date and purpose. Your accountant decides which level of evidence your situation needs.
What mistakes do we see with CGT?
- Using the settlement date to decide the tax year. It's the contract date.
- Forgetting capital works deductions reduce the cost base of a rental property.
- Missing costs that increase the cost base: stamp duty, legal fees, capital improvements, sale costs.
- Assuming inherited property is always exempt. It depends on when the deceased bought it, how it was used and how quickly it's sold.
- No clearance certificate at settlement, so 15% of the price is withheld.
- Transferring an asset to a family trust or SMSF without realising it's a sale at market value, plus possible stamp duty.
- Selling winners and losers in the wrong order across the 1 July 2027 change.
How does CGT advice work with BPAG?
- Free strategy call. Tell us what you're selling, when you bought it and how it's been used. We'll say whether you need advice or just a careful return.
- Gather the history. Purchase and sale documents, improvements, depreciation schedules, residency history and any valuations.
- Calculate and test. Our CGT agent works through the cost base, discount, main residence rules, small business concessions, foreign resident rules and the 2027 transition. A qualified accountant reviews each step and the result.
- Plan the timing and structure. If the contract hasn't been signed, we show you whether the year, the order of sales or the owner changes the tax.
- Written advice. For significant sales we put it in writing, so you, your solicitor and your conveyancer work from the same numbers.
- Return and records. We include the gain in the right return and keep the working, including your 30 June 2027 evidence, on file.
BPAG runs on Nagaris. Agents draft the calculations; qualified accountants review and sign off, and nothing is lodged without a person approving it.
"We have been working with Ray and the fantastic team at BPAG Accountants for several years, and it has truly been the best decision for our company… Their invaluable support has saved us a great deal of money and time." Susan McKendry, Google review
What does it cost?
CGT advice on a sale is quoted as a fixed fee once we've seen the asset's history. Clients on our ongoing plans have CGT on a sale handled within their tax return, and our Fractional CFO plan (from $499 per week + GST) includes proactive annual tax planning, which is where sale timing gets decided. See our pricing page.
What should you send us?
- Purchase contract and settlement statement
- Sale contract (or the expected price and date)
- Receipts for capital improvements, and depreciation schedules for rentals
- Dates the property was your home, rented or vacant
- Your residency history, if you've lived overseas
- For inherited assets: date of death, the will and the deceased's purchase details
- For shares: broker statements and dividend reinvestment statements
- Any valuations, including for 30 June 2027
If the asset is a business, start with our selling a business service. If it's property you own as an investor, our page for property investors explains how we work with you year-round.
Frequently asked questions
How much does a capital gains tax accountant cost?
It depends on the asset and how complex the history is. A single share sale with good records is quick. A property with decades of history, periods as a rental and as a home, inherited ownership or foreign residency takes more work. We quote a fixed fee before we start, and for clients on an ongoing plan, CGT on a sale is usually handled as part of the tax return.
When is capital gains tax paid?
There's no separate CGT payment. The net capital gain is included in your tax return for the income year in which the contract was signed, and the tax is paid with that year's assessment (or through a company's or trust's return). If you're on PAYG instalments, a large gain can also increase next year's instalments.
Can I reduce capital gains tax by selling in a low-income year?
Often, yes. Because an individual's net capital gain is added to taxable income, a year with less other income, such as after retirement or during a career break, can mean a lower rate on the gain. From 1 July 2027 a 30% minimum tax applies to certain gains of individuals, which limits this for post-2027 growth, so the planning changes.
Do I pay CGT if I give an asset to my children?
Usually, yes. Gifting an asset, or selling it to a family member below its value, is treated as a sale at market value. You may owe tax on a gain without receiving any money, and stamp duty can also apply to property. There are exceptions, such as some transfers on death and some relationship breakdown transfers, so check first.
Do I need a valuation for capital gains tax?
You need one when the law uses market value instead of what you paid or received: for example when a home becomes a rental, when you stop being an Australian resident, for family transfers, for some inherited assets, and for the 30 June 2027 snapshot. For significant amounts, a registered valuer's report is the safest evidence.
What records do I need to keep?
The contract and settlement statement for the purchase and sale, receipts for capital improvements and the costs of buying and selling, and any valuations. Keep them for at least five years after the asset is sold. For assets held at 30 June 2027, keep the evidence of their value on that date for as long as you own them and five years after.
Official sources
General information only, current as at 18 October 2026. It is not personal tax, legal or financial product advice and doesn't take your circumstances into account. Talk to us before you act. Where a recommendation needs a licensed financial adviser or a solicitor, we work alongside them.