How Capital Gains Tax Works on Shares in Australia

When you sell shares or ETFs for more than you paid, the profit is a capital gain and is added to your taxable income for the year. You don't pay a separate "CGT rate" — the gain is simply taxed at your marginal tax rate.

The key benefit for long-term investors is the 50% CGT discount. If you hold shares for at least 12 months before selling, only half the capital gain is included in your assessable income. This effectively halves the tax you pay on the profit.

Costs You Can Deduct

Brokerage fees on both the purchase and sale reduce your capital gain. If you sold at a loss, that capital loss can be carried forward and offset against future capital gains — it never expires.