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CGT property calculator

What capital gains tax will you actually pay when you sell your investment property? The calculator models BOTH the current pre-2027 regime (50% discount on held-over-12- month gains) AND the announced post-2027 regime (CPI-indexed cost base, no discount) side by side. Adjust the CPI slider on column 2 to stress-test the indexation outcome.

Scroll to the "CGT at sale" output card — that's the answer. The card highlights whichever regime gives you the lowest CGT for the inputs you've entered.

Year 1 results

$288/ wk

your after-tax weekly cost

Includes principal repayments ($120/wk) — that's real cash leaving your account each week, but it builds equity rather than disappearing. Switch the loan to interest only for a holding-cost-only view that matches most other AU calculators.

Annual tax saving

$7,480

$144/wk @ 37%

Gross rental yield

3.6%

$25k/yr rent

Net rental yield

2.9%

$20k/yr net

Break-even year

Beyond hold

$142k cumulative top-up

Loan summary

$3,540/ month

Principal & interest monthly repayment estimate

Weekly repayment

$817/wk

Principal and interest

Loan-to-value ratio

80.0%

$560k loan

Interest over 10y hold

$339k

Cumulative · all tax-deductible

After-tax interest rate

4.09%

6.50% × (1 − 37% marginal)

Loan position

Purchase price$700,000
Deposit$140,000
Loan amount$560,000
Current LVR80.0%
Loan balance year 10$474,746
Principal repaid by year 10$85,254
Year LVR drops below 80%Already below

P&I vs interest-only · over 10-year hold

IO compared: 5y then P&I (typical)

P&IInterest-onlyDifference
Monthly (year 1)$3,540$3,033−$506
Monthly (year 6+)$3,540$3,781+$242
Total interest over 10y$339,496$356,018+$16,522
Loan balance at year 10$474,746$507,148+$32,402

Interest-only saves $506/mo while in IO but pays $17k more interest over the 10-year hold and leaves you with $32k more debt at exit — no principal is paid down during the IO phase.

LMI typically applies above 80% LVR. Lenders Mortgage Insurance is a one-off cost (often added to the loan) that can run $5,000–$30,000 depending on the borrowed amount. Add an estimate to the LMI / other line in Cost-base adjustments so it flows into your CGT cost base.

Who pays in year 1

$47,475 total

Interest + holding costs + principal repayments.

53%
16%
32%
Tenant
rent$25,000
ATO
tax refund$7,480
You
out of pocket$14,995

Cashflow projection

Click a year to inspect

Post-tax cashflow includes your negative-gearing refund. Pre-tax is before any tax effect.

Post-tax
Pre-tax

Cashflow detail (year 1)

Annual figures. Negative = cash leaving your account.

Effective rent

After vacancy

$25,000

Loan interest

−$36,216

Cash expenses

Rates + insurance + management + repairs

−$5,000

Principal repayment

Reduces loan, builds equity

−$6,259

Pre-tax cashflow

−$22,475

Tax refund (negative gearing)

Loss × 37% marginal rate

$7,480

Post-tax cashflow

−$14,995

Why depreciation matters:

The $4,000 of depreciation is non-cash — it doesn't move money, but it adds to the rental loss and increases your tax refund. We've already included this above.

Equity & LVR over time

Loan shrinks from amortisation; value grows from capital growth. LVR (right axis) drops as the loan-to-value ratio improves — from 75.3% at purchase to 41.6% at the end of the hold.

Equity
Loan balance
LVR (right axis)

Year 10 equity

$665k

Year 10 value

$1.14M

Total out-of-pocket

$142k

CGT at sale

Three regimes side-by-side, applied to your projected sale. Pre-2027 is current law; post-2027 reflects the Budget 2026 announcement.

Sale price (year 10)

$1.14M

Cost base

$737k

+ Costs & improvements

$39k

− Div 43 claimed

$30k

Gross gain

$403k

2.5%
0.0%8.0%

Higher CPI grows the indexed cost base, reducing the taxable gain in the post-2027 regime.

Pre-2027 (50% discount)

CGT payable

$75k

Taxable gain

$201,610

Effective rate

18.5%

Net proceeds

$1,065,630

  • • Held ≥ 12 months — eligible for 50% CGT discount

Post-2027 (CPI indexation)

Lowest CGT

CGT payable

$73k

Taxable gain

$196,797

Effective rate

18.1%

Net proceeds

$1,067,411

  • • Cost base indexed at 2.5% p.a. over 10 years
  • • No 50% discount applied

Post-2027 (new-build regime)

CGT payable

$75k

Taxable gain

$201,610

Effective rate

18.5%

Net proceeds

$1,065,630

  • • Detailed rules not yet legislated — placeholder mirrors pre-2027

Estimates only — not tax or financial advice. The 2027 regime depends on legislation that isn't yet final. Talk to a registered tax agent before acting on these figures.

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How CGT on Australian property works

Capital gains tax in Australia isn't a separate tax — it's your marginal income tax applied to the gain in the year of sale. The gain is calculated as sale price minus cost base, where the cost base is your purchase price plus all the costs of acquiring and improving the property, minus any Division 43 depreciation you claimed during ownership.

Under current law (the pre-2027 regime), if you held the property for more than 12 months, you get a 50% discount on the gain before it's taxed. So a $400k gross gain becomes a $200k taxable gain. At a 37% marginal rate, that's $74k CGT — vs $148k without the discount.

The post-2027 regime (announced in Budget 2026, legislation in progress) replaces the 50% discount with a CPI-indexation model. The cost base is grown by inflation across your hold period, then the indexed gain is taxed at the full marginal rate. For long holds with high inflation, this can produce a LOWER CGT than the pre-2027 discount. For short holds with low inflation, the discount wins. The breakeven depends on hold period and CPI — the calculator lets you find yours.

The Div 43 cost-base clawback (the surprise nobody warns you about)

When you claim Division 43 capital works depreciation each year (2.5% of construction cost, deductible against rental income), the ATO is essentially lending you the deduction up-front — and clawing it back at sale by reducing your cost base. So a property you bought for $700k where you've claimed $4,500/year Div 43 for 10 years has its cost base reduced by $45,000 — and your taxable gain goes up by the same amount.

The net effect for most investors at a 37% marginal rate is that Div 43 still saves you tax (you got the deduction at full rate annually, but the clawback applies the 50% discount), but the saving is roughly half what you might assume from the annual deduction alone. Div 40 (plant and equipment) is NOT clawed back — it's a pure tax win.

Cost-base adjustments — where the cost base actually comes from

The "cost base" is more than the price you paid. It includes stamp duty, legal / conveyancing fees, LMI premium (if you paid it), inspection fees, borrowing setup costs, AND any capital improvements (renovations, extensions, capital works). The calculator's cost-base adjustments input defaults to ~5.5% of purchase price — a rule-of-thumb for AU residential acquisition costs ex capital improvements. If you've renovated, add the renovation cost. The bigger your cost base, the smaller your gain, the less CGT.

Frequently asked questions

How is capital gains tax calculated on an investment property in Australia?

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CGT on property is: (sale price − cost base) × your marginal tax rate, after applying any discount. Cost base = purchase price + acquisition costs (stamp duty, legal, LMI, capital improvements) − cumulative Div 43 depreciation claimed during ownership + sale costs (agent commission, legal). The capital gain is added to your taxable income in the financial year of sale and taxed at your marginal rate. If you owned the property over 12 months, the pre-2027 regime gives a 50% discount on the gain before tax applies.

What's changing post-2027?

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The Australian government has announced (Budget 2026) that the 50% CGT discount on individually-held investment property will be replaced with a CPI-indexation model from 2027 onwards. Instead of halving the gain, the post-2027 regime indexes the cost base upward by inflation across the hold period — so only the REAL gain (above inflation) is taxed. The calculator shows both regimes side-by-side so you can compare the impact for your hold period and CPI assumption. The new-build / build-to-rent regime details have not yet been legislated; the third column in the calculator is a stub.

Which regime is better for me?

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It depends entirely on your hold period and CPI. Short hold + low CPI = pre-2027 wins (the 50% discount beats indexation). Long hold + high CPI = post-2027 wins (compound CPI indexation grows the cost base faster than the flat 50% discount). For a 10-year hold at 3% CPI, the two regimes produce similar CGT figures. For 25+ years at 4%+ CPI, indexation tends to win. The CPI slider in the calculator lets you stress-test the breakeven for your specific scenario.

What expenses go into the CGT cost base?

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ATO recognises five "cost base elements" under ITAA 1997 s.110-25. Element 1: purchase price. Element 2: incidental costs of acquisition — stamp duty, legal fees, conveyancing, LMI, inspection fees, borrowing costs. Element 3: ownership costs (rates, interest, insurance) — but ONLY if the property was NOT generating income. For investment property where you claimed annual deductions, you can't double-dip — Element 3 is excluded. Element 4: capital improvements (renovations, extensions). Element 5: cost to preserve or defend title. The calculator includes Elements 2 and 4 in its cost-base adjustments input; Element 1 is the purchase price; Element 3 is deliberately omitted.

Why does the calculator subtract depreciation from the cost base?

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Division 43 (capital works) depreciation is a deductible expense each year you own the property. At sale, the ATO claws it back — the cumulative Div 43 you've claimed reduces your cost base, increasing the gain (and the CGT). Division 40 (plant and equipment) is NOT clawed back — it's deductible only. The calculator handles this correctly: only Div 43 reduces the cost base. This matches ATO ITAA 1997 s.110-45.

Does the 6-year main residence rule affect this calculator?

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No — the calculator models pure investment property, not the 6-year main-residence rule (which allows you to treat a previous principal place of residence as your main residence for up to 6 years while it's rented). If your property has spent time as both PPOR and investment, the CGT calculation gets complex — partial main-residence apportionment plus the 6-year rule plus possible reset of cost base at the date PPOR ceased. Talk to a registered tax agent; this calculator is for properties that have ALWAYS been investments.

How accurate is the post-2027 indexation figure?

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The calculator uses the model announced in Budget 2026: indexed cost base = original cost base × (1 + CPI)^holdYears, no 50% discount. The actual legislation may add carve-outs (new-build exclusion is announced, details TBD), grandfathering (properties acquired before 2027 might retain the 50% discount option — also TBD), or adjustments to the indexation factor (e.g. quarterly CPI vs annual). Treat the post-2027 column as the BEST INFORMATION AVAILABLE at the time of this page, but check the ATO website for confirmed legislation before relying on it for tax planning.

What if I sell at a loss?

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A capital loss on an investment property can't reduce your other income (unlike negative gearing on rent). It can only offset other capital gains — in the same year, or carried forward indefinitely to future years. If you have no future capital gains, the loss is wasted. The calculator floors CGT at zero (no negative-CGT) so a loss-making sale just shows $0 CGT; the loss itself isn't modelled as a separate output.

After you buy

PlotBot reads every receipt, contract and bank statement — automatically.

Forward an email or upload a PDF. PlotBot files it under the right property, classifies it for tax, matches it to bank transactions, and syncs to Xero. Built in Australia for property investors. 14-day free trial.

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A note on accuracy

Estimates only — not tax or financial advice. The post-2027 regime is based on Budget 2026 announcements; final legislation may add carve-outs, grandfathering, or adjustments to the indexation factor. The pre-2027 regime is current law as of 2026 but ATO rulings change. Doesn't model the 6-year main-residence rule, foreign resident CGT withholding, partial-year apportionment, or company / trust ownership. Talk to a registered tax agent before relying on these numbers for sale-decision planning.