Capital Gains Tax on Property in Australia

Under the Income Tax Assessment Act 1997 (Cth), individuals and trusts who hold an investment property for over 12 months qualify for a 50% discount on capital gains tax liabilities, significantly reducing tax exposure. This discount does not apply to companies, which are taxed at their standard corporate tax rate.

Your primary place of residence is generally exempt from CGT. To qualify, you must have lived in the home throughout the ownership period, and the property must not have been used to produce assessable rental income.

Under Section 118-145 of the Income Tax Assessment Act 1997, you can continue to treat your former home as your main residence for CGT purposes for up to 6 years if you rent it out, provided you do not claim any other property as your main residence. If the property is left vacant, the exemption can apply indefinitely.

The capital gain is calculated by subtracting your cost base from the sale price. The cost base includes: (a) Original purchase price; (b) Transaction costs (stamp duty, legal fees, agent commissions); (c) Capital improvements (renovations). Bypassing agent commissions keeps these proceeds in your bank account, lowering your tax burden.

Under the Income Tax Assessment Act 1997, Capital Gains Tax applies to the sale of residential property in Australia unless the main residence exemption is claimed. If the property was used as an investment, CGT is calculated based on the difference between the sale price and the property's cost base.

The cost base includes the original purchase price, stamp duty, legal fees, and capital renovation costs. Sourcing a tax accountant early ensures you calculate this cost base correctly.

Direct off-market transactions allow you to plan exchange and settlement dates to align with your personal tax brackets, minimizing tax.

All property sales in New South Wales must follow the Conveyancing Act 1919 (NSW). This rule applies directly to your transition involving real estate transactions.

Sellers must attach specific documents to the Contract of Sale before advertising. These documents protect both parties.

For relationship separations, transfers comply with the Family Law Act 1975. For deceased estates, executors must obtain probate under the Succession Act 2006. The final transfer is settled securely online.

Property settlements in New South Wales must complete electronically. Conveyancers coordinate the transaction securely in the PEXA digital workspace. This workspace links banks, solicitors, and the land registry.

Funds are wired in real time. Outgoing mortgages are paid off instantly. The remaining cash goes directly to the seller's account. Title transfer occurs at the same time, ensuring total transaction safety.