In Australia, capital gains tax (CGT) is not a separate tax but is included as part of an individual's ordinary income and taxed at their marginal tax rate. For individuals, the tax rates range from 19% to 47% in 2025, including the Medicare Levy. If an asset is held for more than 12 months, an individual may be eligible for a 50% discount on the capital gain, effectively reducing the CGT rate to between 9.5% and 23.5%. Companies are taxed at 25-30% on capital gains and do not qualify for this discount. Superannuation funds generally pay 15% or 10% after discount on capital gains.
For Australian residents, the marginal tax brackets in 2025 are approximately:
- Up to $18,200: 0% (tax-free threshold)
- $18,201 to $45,000: 16%
- $45,001 to $135,000: 30%
- $135,001 to $190,000: 37%
- Over $190,000: 45%
A 2% Medicare Levy is also applied on top of these rates. Non-residents face higher CGT rates without the tax-free threshold, starting at 30%.
Thus, an individual's capital gains tax depends on their total taxable income, including the gain, and discounts if eligible for long-term holdings.
