Capital Gains Tax When Selling a Brisbane Investment Property

What is Capital Gains Tax?

Capital Gains Tax is not a separate tax, it is part of your income tax. When you sell an investment property for more than you paid for it, the profit (the capital gain) is added to your assessable income for that financial year and taxed at your marginal rate.

Does CGT apply to your principal place of residence?

Generally no. Your main residence is exempt from CGT provided you have lived in it for the entire period of ownership and it is on less than two hectares of land. However, the exemption is proportional if you rented the property out at any stage, used it partly for business or if it was not your main residence for the full period.

The 50% CGT discount

If you have owned the property for more than 12 months, you are entitled to a 50% CGT discount as an individual. This means only half of your net capital gain is added to your taxable income. This is one of the most powerful concessions available to Australian property investors.