Know More about Capital Gains Tax

25 Nov, 2021

Know More about Capital Gains Tax

The terms ‘capital gains tax’ and ‘capital gains’ have been thrown around a lot in the real estate world but there are so many questions surrounding it. It is a part of everyday life to pay tax, and yet only a handful of people have a thorough understanding of paying capital gains tax.

We want everyone to make informed property purchasing decisions here at St Trinity so we will take you through the ins and outs of capital gains tax so that you will know exactly how it could benefit you. 

Know More About Capital Gains Tax

What is Capital Gains Tax (CGT)?

CGT is the tax you pay in a tax year on profits from selling assets, such as property. The government tax individuals for the money they made out of their properties. It is influenced by the market value of the property.

Do we have to pay it separately?

It is not a separate tax you have to pay; although it is known as ‘capital gains tax’, it is actually a part of your income tax and it is applicable to all of your properties, regardless of it being one of your investments properties or primary residence.

Why and when do we have to pay Capital Gains Tax (CGT)?

You pay capital gains tax because you have made a profit out of a property and like other taxes individuals pay, the Australian Taxation Office manages the details of CGT, including the tax rate and potential capital gains tax discount.

CGT is not a separate tax. Your net capital gains are included in your assessable income in the year you paid capital gains tax. CGT is due when you file your income tax return at the end of the same financial year.

We have capital gains, so is there a capital loss?

Yes! The measure of a capital gain/loss assesses the difference between your cost base (purchase price and other costs such as stamp duty, cost of advertising or marketing, etc.) and capital proceeds (sale price). This considers any incidental costs on the purchase and sale.

It’s a capital gain if you sell an asset for more than what you spent when you purchased it and it’s a capital loss if you sell it for less.

You report capital gains and capital losses in your income tax return, with capital gains tax being the tax you pay for your gains.

Take a look at this example below:

You bought an investment property in 1999 for $194,000.

You sell this property in 2018 for $770,000.

Your purchasing costs in 1999 were $2,500.

Over the years of ownership, costs were $168,820.

Sales costs were $30,500.

770,000 – 194,000 = 576,000

576,000 – (2,500 + 168,820 + 30,500) = $374,000 (this is your capital gain)

How do we work out how much capital gain tax is needed to pay?

If you’re an individual, the tax rate paid is the same as your income tax rate for that year.

However, if you made a capital gain and you’ve held that asset for greater than 12 months, and you are an Australian resident for tax purposes, you can reduce your capital gain by 50%. This is called the capital gains tax (CGT) discount.

For example, if your net capital gain is $374,000 and all of the above conditions are applied, you are qualify for the CGT discount and only pay tax for the $187,000 capital gain you make.

If you’re a company, you’re not entitled to any capital gains tax discount and you’ll pay 30% tax on any net capital gains.

Are there any exemptions?

According to the Australian Taxation Office (ATO), CGT applies to assets you sell or dispose of, except for some exempt assets, such as your home and car.

Although most properties are subject to CGT, including rental properties, holiday houses, hobby farms, vacant land and business premises, your main residence (your home) is exempt from CGT.

Your home is exempt from CGT if you are an Australian resident and the dwelling:

  • Has been the home of you, your partner and other dependants for the whole period you have owned it
  • Has not been used to produce income (not investment properties) – that is, you have not run a business from it, rented it out or ‘flipped’ it (bought it to renovate and sell at a profit)
  • Is on the land of 2 hectares or less.

How can we be smart about it?

Taxpayers can choose to realise their gains and pay tax at a time that’s advantageous to them because CGT provisions don’t treat the transfer of an asset by inheritance as a sale. 

  • You can do it after retirement when your income is low. 
  • If you have made a capital loss from your ownership, you can deduct it from your existing capital gains to reduce the amount of tax. 
  • If you don’t have other capital gains that year, you can carry over any capital losses to other income years and keep something handy for another time in your inventory.

Additional Help

To get more information on playing the capital gains tax game smartly, you can always gain some professional advice. There are financial services such as accountants, financial advisors and us, who are keen to explain how your pockets can carry more money.

What if I have capital gains?

If you have a capital gain, it will increase the tax you need to pay. You may want to work out how much tax you owe and set aside funds to cover it.

As a buyer, you could be eligible for a 50% discount on your capital gain (after applying capital losses) for any capital gains tax asset held for over 12 months before you sell it. Therefore, you should look into what you are eligible for based on your taxable income and assessable income to budget accurately.

Another benefit of Capital Gains

Another benefit is that you can deduct depreciation of the property against your income, reflecting the depreciation of the property over time. This may increase your taxable capital gain if you sell the property because the gap between the property’s value after deductions and its sale price will be greater. 

Do you want to know more about CGT and how it works in your home buying journey? We are happy to help you with all your questions about the topic and other property buying queries. Contact us at the link below & start something with St Trinity.


Last updated: August 2020


St Trinity Property Group and its affiliated entities, representatives, agents and related companies (collectively referred to as ST TRINITY PROPERTY GROUP) respect the privacy and security of your Personal Information, as defined below, and comply with the requirements of the Australian Privacy Principles under the Privacy Act 1988 (Cth).

This Privacy Policy explains in general terms how St Trinity Property Group handles your Personal Information. However, it does not apply to St Trinity Property Group’s employee records to the extent they are handled by any of our companies that is or was the employer of that employee in relation to the employee’s current or former employment. Such employee records are generally exempt from the Act and will be dealt with as permitted by law.

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Under the Act Personal Information is defined as information or an opinion about an identified individual, or an individual that is reasonably identifiable, in whatever form and regardless of whether it is true or not (Personal Information). The Act also defines a subset of Personal Information as sensitive information (for example health records, racial or ethnic origin, religious beliefs, criminal records).

The types of Personal Information we collect and hold will depend on the circumstances of collection and on the type of service we are providing. For example, when we are engaged to sell a property, we may collect and hold Personal Information from both the seller and potential buyers such as name, address, email address, telephone numbers, employment details and details about their business.

We may also collect and hold certain sensitive information that is reasonably necessary for the provision of our services, including health and criminal records. If you provide us with any sensitive information, you consent to us collecting that information and handling it in accordance with this Privacy Policy.


We may collect Personal Information about you directly when you deal with us over the telephone, send us correspondence (whether by letter, fax or email), have contact with us in person, visit our websites or complete hard copy or online forms.

There are also circumstances where we may collect Personal Information about you from someone else. For example, from:
• Market research companies contracted by us to obtain information so that we may improve and market our services;
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• Property developers who contract us to market properties;
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• and Anyone you have authorised to deal with us on your behalf.

We also automatically collect certain information when you visit our websites or our subscribers receive promotional emails from us via cookies and other tracking technology (such as web beacons), some of which may be capable of personally identifying you. Such information includes the type of browser and operating system you are using, your IP address and how you use our websites.
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Regardless of how it is collected, we handle Personal Information in accordance with this Privacy Policy.


We generally collect, hold and use your Personal Information for the purposes for which it is provided to us (which will usually be obvious at the time of collection), related purposes or as permitted or required by law. Such purposes may include:
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We generally use information automatically collected by cookies and other tracking technology to identify you as a valid user, ensure that no one else can sign on simultaneously with your account from another computer and help us serve you better based on your registration preferences. We may also use cookies to help us facilitate any promotions or surveys that we provide. Third parties whose products or services are accessible on our websites may also use cookies, and we advise you to check their privacy policies for information about their cookies and other privacy practices.


We may disclose your Personal Information to third parties as may be necessary for any of the purposes stated in the above section. Such third parties generally include:
Our third party providers, contractors, consultants, agents and/or representatives (such as law firms, banks, financial institutions, insurers, IT providers, mortgage referral services providers and/or wealth management services providers) who provide services to us or on our behalf, including to:
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• Debt collection agencies; and/or Any other third parties identified at the time of collection of your Personal Information.


Some of the third parties listed above to whom we may disclose your Personal Information are located overseas. For example:
Our information technology and business process service providers that are located in countries including (but not limited to) the Indonesia, India and Philippines; and Our overseas clients that are located in the same countries as the companies within the St Trinity Property Group.
Our contracts with these parties generally include an obligation for them to comply with Australian privacy law and this Privacy Policy.
However you acknowledge that, by agreeing to the disclosure of your Personal Information to these entities outside of Australia, we will no longer be required to take reasonable steps to ensure the overseas recipient’s compliance with the Australian privacy law in relation to your Personal Information and we will not be liable to you for any breach of the Australian privacy law by these overseas recipients. On this basis, you consent to such disclosure.


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If you wish to make a complaint about a breach of this Privacy Policy or the Australian Privacy Principles of the Act you can contact us using the contact details below. You will need to provide us with sufficient details regarding your complaint together with any supporting evidence. Our Chief Privacy Officer will investigate the issue and determine the steps that we will undertake to resolve your complaint. We will contact you if we require any additional information from you and will notify you in writing of the outcome of the investigation. If you are not satisfied with our determination, you can contact us to discuss your concerns or contact the Australian Privacy Commissioner via www.oaic.gov.au.


St Trinity Property Group may update this Privacy Policy from time to time so please review it periodically for changes. If the changes are significant or substantive, they will either be advised to you in writing or posted on our websites at www.sttrinity.com.au. Your continued use of our websites or services, requesting our assistance or the provision of further Personal Information to us (directly or via an authorised person) after this Privacy Policy has been revised, indicates your acceptance of the revised Privacy Policy.


If you have a query relating to this Privacy Policy or wish to make a complaint, please contact us using the following contact details:
• St Trinity Property Group
• Chief Privacy Officer

• PO Box 1235
• Menai NSW 2234
[email protected]


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