Navigating Capital Gains Tax on Investment Properties in Queensland

If you’re considering selling an investment property in Queensland, it’s crucial to understand the implications of capital gains tax (CGT). CGT is a tax on the profit made from selling an asset like property, and it’s paid to the Australian Taxation Office (ATO). This article provides essential insights into CGT for property investors in Queensland, including when it’s payable, how it’s calculated, and methods to potentially reduce your tax liability.

What is Capital Gains Tax?

Capital gains tax in Australia is levied on the profit obtained from selling an asset, such as an investment property. The taxable amount is the difference between what it cost you to acquire and improve the property (the cost base) and what you receive when you sell it. Your marginal tax rate then determines the CGT rate applied to this gain.

When is CGT Applicable?

CGT is triggered when you sell a property and realize a capital gain, except in cases where the property is your primary residence or was acquired before September 20, 1985. In Queensland, selling an investment property typically requires you to pay CGT.

Calculating CGT on Investment Properties

The CGT calculation involves several variables:

  • Purchase price and sale price of the property.
  • Duration of ownership.
  • Costs from capital improvements.
  • Expenses from the sale process.

To determine CGT, subtract the cost base (total of purchase cost, improvements, and sale expenses) from the sale price to find the capital gain. This gain is then subject to CGT.

How is CGT Paid?

Upon selling an investment property in Queensland and realizing a capital gain, you must report this in your tax return for the financial year of the sale. The ATO assesses the CGT due based on your submission.

Reducing CGT Liability

There are strategies to potentially reduce CGT:

  • Utilize the CGT discount by holding the property for at least 12 months, which allows a 50% reduction of the capital gain.
  • Deduct any capital losses against capital gains to lower the taxable gain.


  1. Is CGT applicable when selling a primary residence in Queensland?
    • No, CGT does not apply to your primary residence if it meets specific criteria, like being your main residence throughout the ownership period.
  2. What is the CGT discount?
    • For assets held longer than 12 months, the CGT discount allows individuals to reduce their capital gain by 50% before tax.
  3. How do I determine the cost base of an investment property?
    • The cost base includes the purchase price, costs of improvements, and sale-related expenses.
  4. Can I offset capital losses against gains?
    • Yes, capital losses can be subtracted from capital gains in the same financial year, reducing your overall CGT liability.
  5. Who calculates the CGT I owe?
    • While your solicitor can’t calculate CGT, your accountant can provide a precise calculation based on your tax records and specific details of the property transaction.

Understanding CGT is vital for any property investor in Queensland, ensuring compliance and informed decision-making when selling properties. Proper planning and advice can significantly affect the financial outcome of your investment activities.

Note: This content is for informational purposes only. For tailored advice, consult your accountant or tax specialist. For more information, visit the ATO’s official website.