Not every asset you sell is subject to capital gains tax. Australian tax law provides a number of exemptions and concessions that can reduce or eliminate CGT entirely. Understanding which apply to your situation can significantly reduce your tax bill.
Full CGT Exemptions
Your Main Residence
The sale of your principal place of residence (main home) is generally fully exempt from CGT. You must have lived in the property as your main home for the entire ownership period. If you rented it out at any point, a partial exemption may apply.
See Main Residence CGT Exemption for the full conditions.
Pre-CGT Assets
Assets acquired before 20 September 1985 are generally exempt from CGT. This is because CGT was introduced on that date and does not apply retrospectively to assets already owned.
If you have owned an asset since before 1985, you should verify the acquisition date carefully — no gain is assessable on disposal.
Personal Use Assets Under $10,000
Personal use assets are items you own primarily for your personal use and enjoyment — not for investment. Examples include cars, boats, furniture, and household goods.
Personal use assets acquired for $10,000 or less are exempt from CGT. For assets acquired for more than $10,000 (e.g., a boat), CGT applies to any gain, but any capital loss cannot be used to offset other gains.
Collectables Under $500
Collectables — artwork, jewellery, coins, stamps, antiques — acquired for $500 or less are exempt from CGT. Capital losses on collectables can only offset capital gains from other collectables.
Cars and Motorcycles
Cars and motorcycles are always exempt from CGT, regardless of their value. Any capital gain from selling a private vehicle is not taxable.
Compensation and Damages
Compensation received for:
- Personal injury or illness (including workers’ compensation)
- Certain wrongs or injuries (under court orders)
is generally not subject to CGT.
Partial Exemptions and Concessions
The 50% Discount
For individuals and trusts who have held an asset for more than 12 months, only 50% of the net capital gain is taxable. This is not a full exemption but is the most widely used CGT concession. See The 50% CGT Discount.
Partial Main Residence Exemption
If your home was your main residence for only part of the ownership period (e.g., you lived there for 5 years, then rented it for 3 years before selling), a partial exemption applies proportionally. See Partial Main Residence Exemption.
The Six-Year Absence Rule
You can be absent from your home for up to six years (e.g., while renting it out) and still claim the full main residence exemption — provided you do not treat another property as your main residence at the same time. See The Six-Year CGT Absence Rule.
Small Business CGT Concessions
Eligible small businesses can access a range of concessions to reduce or eliminate CGT on the sale of active business assets:
- 15-year exemption — full exemption if the asset is owned for 15+ years and certain conditions are met
- 50% active asset reduction — reduces the gain by 50% for qualifying active assets
- Retirement exemption — up to $500,000 lifetime exclusion on retirement
- Rollover — defer the gain if you acquire a replacement asset
See Small Business CGT Concessions.
CGT Rollover Relief
In certain circumstances, you can defer (not eliminate) a capital gain by rolling it over to a replacement asset. Rollovers are available for:
- Relationship breakdown (marriage or de facto separation under a court order)
- Compulsory acquisition by government
- Small business replacement asset rollover
Related Articles
- Main Residence CGT Exemption
- Small Business CGT Concessions
- The 50% CGT Discount
- Capital Gains Tax Australia hub
Frequently Asked Questions
Is my car exempt from CGT? Yes. Cars and motorcycles are always exempt from CGT in Australia, regardless of the sale price.
Is my main home exempt from CGT? Generally yes, if you lived in it as your main residence for the entire period of ownership and did not use it to produce income. Partial exemptions may apply if you rented it out at any point.
What is a pre-CGT asset? Any asset acquired before 20 September 1985 is a pre-CGT asset and is generally exempt from capital gains tax.
This article provides general tax information for FY2025–26. For advice tailored to your situation, speak with a registered tax agent or accountant. Find one through the Tax Practitioners Board register.