Capital Gains Tax (CGT) Framework: Who Qualifies and What You Get
Understand how profit from selling investment assets is taxed and what you need to prepare for the tax season.
This framework outlines how the profit you make from selling certain assets is treated for tax purposes.
Who it's for
This applies to property owners who are selling assets held for investment purposes.
What you get
You receive a standardized way to calculate and report the tax owed on the profit made from selling an investment asset.
What it costs you
Managing this requires significant time for record-keeping to track your costs and asset history. Because the rules are complex, you will likely need to pay for professional accounting advice to ensure your reporting is accurate.
The catch to know
Many people mistakenly assume that the exemption for a main residence applies to investment properties. If the property was used to earn income, different rules apply.
How to apply
- Keep detailed records of all costs related to your investment asset.
- Determine your cost base, which is the total cost of acquiring and holding the asset.
- Calculate the difference between your sale price and your cost base.
- Report the gain as part of your annual tax return.