Updated 06/11/2026
How do I estimate capital gains tax when I sell an investment property?
Start with the sale price, subtract your cost base (what the property cost you to buy, improve and sell, less anything already claimed as a deduction), and the difference is your capital gain. How much of that gain is taxed depends on how long you held it and when the gain built up: gains up to 30 June 2027 can still get the 50% discount for property held over 12 months, while gains from 1 July 2027 are taxed under new indexation rules passed in June 2026.
Step 1: Work out your cost base
The cost base is usually what you paid for the property plus the costs of buying, holding and selling it that you haven't already claimed as deductions. The ATO splits it into five elements. In practice that includes:
- Purchase price
- Stamp duty, legal and conveyancing fees, and building and pest reports
- Capital improvements, such as a new kitchen or extension
- Selling costs, such as agent commission, advertising and legal fees
Capital works deductions you have claimed over the years reduce the cost base. That is one reason keeping records from day one matters.
Step 2: Work out the gain
Capital gain = sale price − cost base
The date that counts for CGT is usually the date you sign the contract of sale, not settlement.
Step 3: Apply the right rules
The rules changed in 2026. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed Parliament on 25 June 2026.
| Situation | How the gain is treated |
|---|---|
| Sold before 1 July 2027, held over 12 months | 50% CGT discount, as before |
| Owned before 1 July 2027, sold after | Gain up to 1 July 2027 keeps the 50% discount; gain after that uses cost base indexation with a 30% minimum tax |
| Bought and sold after 1 July 2027 | Cost base indexation with a 30% minimum tax |
| Eligible new build | Choose either the 50% discount or the new rules when you sell |
| Your main residence | Still exempt from CGT |
Under the new rules, the cost base is adjusted for inflation, so only the real gain is taxed, and a minimum tax rate of 30% applies to that gain.
Step 4: Add it to your income
Your taxable capital gain is added to your other income for the year and taxed at your marginal rate, subject to the new 30% minimum for post-2027 gains. Capital losses can reduce capital gains but not your salary.
Worked example under the old rules (illustrative only)
| Item | Amount |
|---|---|
| Sale price | $850,000 |
| Cost base (purchase, stamp duty, fees, improvements, selling costs) | $640,000 |
| Capital gain | $210,000 |
| 50% discount (held over 12 months, sold before 1 July 2027) | −$105,000 |
| Taxable capital gain added to income | $105,000 |
If the same property is sold after 1 July 2027, the gain is split at that date and each part is taxed under its own rules. Ask your accountant early whether you need a valuation at 1 July 2027.
Planning ahead
CGT is often the biggest single cost when you sell, so estimate it before you list, not after. Opulo's CGT Calculator works from the purchase and cost details you have stored, shows which of your properties are grandfathered under the 2026 changes, and models your tax exposure.
Tax rules are complex and still being finalised in places, including the definition of an eligible new build. Get advice from a registered tax agent before you sell.