CGT (Capital Gains Tax)

Capital Gains Tax isn't a separate tax - it's the tax you pay on the profit (the capital gain) when you sell an investment property. The gain is added to your taxable income for the financial year in which the contract of sale is signed (not settlement date) and taxed at your marginal rate. The gain is calculated as sale proceeds minus the cost base (purchase price plus stamp duty, legal fees, capital improvements, and selling costs). Australian residents who hold the property longer than 12 months qualify for the 50% CGT discount, which halves the taxable gain. Companies don't get the discount; SMSFs get a one-third discount instead.