In short: This calculator estimates the tax on the profit when you sell an investment property. The gain is the sale price minus your cost base (purchase price, stamp duty, legal fees, selling costs and capital improvements). Hold for more than 12 months and only half the gain is taxed, at your marginal rate plus 2% Medicare levy. Your own home is exempt.
- Capital gain$185,000
- Taxable gain after discount$92,500
- Net proceeds after CGT$746,175
- Effective tax on gain18.3%
Main residence is usually exempt. Uses 2026–27 rates plus Medicare levy. Not tax advice.
Estimated CGT payable: $33,825
That is a general estimate on standard assumptions. Every lender applies its own expense benchmarks, income shading and policy, so the real figure moves from lender to lender. Gorakh spent years as a senior credit officer deciding exactly these questions. Send him the numbers above and he will tell you what is realistic and which lenders fit — at no cost to you for home loans.
- A former senior credit officer reads itGorakh assessed loan applications on the lender side before he became a broker.
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How this calculator works
Step 1: work out the cost base
Cost base = purchase price + stamp duty + legal fees on purchase + capital improvements (a new kitchen, not repairs) + costs of sale (agent commission, marketing, legals). Claimed building depreciation reduces the cost base; our CGT on property page has the detail.
Step 2: calculate the gross gain
Gross capital gain = sale price minus cost base. A negative result is a capital loss that offsets other capital gains, now or in future years, but not salary.
Step 3: apply the discount and your marginal rate
If you owned the property for more than 12 months, the 50% CGT discount halves the gain. The rest is added to your taxable income at 2026–27 resident rates: nil to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above, plus 2% Medicare levy. The calculator works out tax on your income with and without the gain and reports the difference. Full rules are at ato.gov.au.
How to use the result
Treat the figure as cash to set aside from the sale proceeds, because CGT is paid through your tax return, not at settlement. Pair the result with the land tax calculator and the investment property cashflow calculator to see the whole life-cycle return.
Worked example
A Reservoir nurse earning $90,000 bought a Wollert investment unit for $450,000 four years ago and sells it for $600,000. It was always rented.
| Item | Amount |
|---|---|
| Purchase price | $450,000 |
| Stamp duty (VIC general rate on $450,000) | $22,070 |
| Legal fees on purchase | $1,500 |
| Capital improvements (new flooring and blinds) | $10,000 |
| Agent commission on sale (2%) | $12,000 |
| Legal fees on sale | $1,500 |
| Total cost base | $497,070 |
| Gross capital gain | $102,930 |
| 50% discount (held over 12 months) | $51,465 taxable |
| Tax on $90,000 income (with Medicare) | $19,320 |
| Tax on $141,465 income (with Medicare) | $36,241 |
| CGT payable | $16,921 |
Without the discount (sold within 12 months) the CGT would be $37,227. On a $120,000 salary the same discounted gain costs $19,021 because more of it lands in the 37% bracket.
What this calculator doesn't include
- Partial main residence exemptions and the six-year absence rule for a former home.
- Foreign resident rules, where the 50% discount is denied and withholding applies at sale.
- Property held in a company, trust or SMSF; our SMSF property guide covers super funds.
- Pre-CGT assets bought before 20 September 1985.
- Medicare levy surcharge and offsets.
Tips to improve the outcome
- Keep every receipt from day one. Costs you cannot prove cannot be added to the cost base.
- Hold for more than 12 months; the 50% discount is the biggest saving available to individuals.
- Time the contract date; signing in July rather than June moves the gain into a year where you may earn less.
- Consider ownership before you buy. Splitting a property between partners spreads the gain across two sets of brackets; see buying property with a partner.
- Realise capital losses, such as poor shares, in the same year.
- Read our investment property guide before selling a former home.
Frequently asked questions
How much capital gains tax will I pay on an investment property?
It depends on the gain and your income in the year of sale. An individual earning $100,000 who makes a $100,000 gain on a property held more than 12 months pays about $17,050 in CGT at 2026–27 rates. Held under 12 months, the same gain costs about $37,350 because the 50% discount does not apply.
Do I pay capital gains tax when I sell my home?
Generally no. Your main residence is exempt from CGT if you lived in it throughout ownership and did not use it to produce income. If you rented it for part of the time, a partial exemption applies, and the six-year absence rule can preserve the full exemption after you move out.
What is the CGT 50% discount?
Individual Australian residents who hold a CGT asset for more than 12 months include only half the gain in taxable income. Companies do not receive it; complying super funds get a one-third discount. The 12 months runs from purchase contract date to sale contract date, not settlement.
When do I pay capital gains tax after selling a property?
You declare the gain in your tax return for the financial year the sale contract was signed, not the settlement date, and pay it after lodgement. Sign in May 2027 and settle in August 2027, and the gain belongs in your 2026–27 return, so contract timing around 30 June matters.
Can I avoid CGT by buying another property?
No. Australia has no rollover relief for reinvesting investment property proceeds into another property. The ways to reduce the bill are a fully documented cost base, holding for more than 12 months, selling in a lower-income year, offsetting capital losses, or the main residence exemption.
Talk to GNT Finance
Selling one property often funds the next. Our investment property loans team can show how the after-tax proceeds become borrowing power for your next purchase, in English, Nepali or Hindi.
Book a free consultation or call 0426 403 703.
This page is general information only and not legal, tax or financial advice. Laws change — confirm current rules with the State Revenue Office, the ATO or a licensed professional.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.