Capital gains tax (CGT) is the tax you pay on the profit when you sell an asset, and for most Queenslanders the biggest asset they will ever sell is property. It is a federal tax run by the Australian Taxation Office (ATO), so the rules are the same in Queensland as anywhere else in Australia. There is no separate Queensland CGT. What changes from state to state is the sale process around it, and that is where Queensland sellers most often get caught out.
This guide covers when CGT applies to property, how to calculate it step by step, the exemptions most sellers rely on, the changes that start on 1 July 2027, and the clearance certificate every Queensland seller needs before settlement.
When does CGT apply to property?
CGT applies when a "CGT event" happens. For property, that is usually signing a contract to sell it. The timing matters: the CGT event happens when you enter the contract, not at settlement, so the date on the contract decides which financial year the gain belongs to.
CGT can also apply when you gift a property, transfer it to a family member or a company, or when ownership changes in a separation. A gift is treated as a sale at market value, even if no money changes hands.
CGT generally applies to:
investment properties
vacant land
holiday homes and second homes
commercial property
new lots created when you subdivide land and sell them (see our guide to subdividing property in Queensland)
It generally does not apply to your home, under the main residence exemption covered below.
You don't pay CGT as a separate bill. The net capital gain is added to your assessable income for the year and taxed at your marginal rate.
How to calculate capital gains tax on a property sale
Step 1: Work out the cost base. The cost base is what the property cost you, and it is more than the purchase price. It includes:
the purchase price
stamp duty (transfer duty) and legal and conveyancing fees when you bought
capital improvements, such as an extension, a new kitchen or a pool (repairs and maintenance don't count)
the costs of selling, such as agent commission, advertising and legal fees on the sale
some holding costs you could not claim as a tax deduction, such as interest and council rates on vacant land you held but did not rent out
The buying costs are easy to forget. Our guide to the hidden costs of buying a house lists them, and every one you can prove lowers your gain.
Step 2: Work out the capital proceeds. This is usually the sale price in the contract. If you sold to a relative below market value, or gave the property away, the ATO uses market value instead.
Step 3: Calculate the capital gain. Capital gain = capital proceeds minus cost base.
Step 4: Subtract any capital losses. Capital losses from other assets, including losses carried forward from earlier years, come off the gain before any discount. Capital losses can only be used against capital gains, not against your wage or other income.
Step 5: Apply the discount, if you are eligible. For a sale under a contract signed before 1 July 2027:
individuals and trusts that held the property for more than 12 months reduce the gain by 50%
complying superannuation funds reduce it by one third
companies get no discount
For gains that accrue from 1 July 2027, the 50% discount is replaced for individuals, trusts and partnerships. See "What changes on 1 July 2027" below.
Step 6: Add the result to your assessable income. The net capital gain is taxed with the rest of your income for that year, at your marginal rate.
A worked example
Sam bought an investment unit in Brisbane in 2019.
Item | Amount |
Purchase price | $500,000 |
Stamp duty and legal fees on purchase | $22,000 |
New kitchen and bathroom (capital improvements) | $28,000 |
Agent commission and legal fees on sale | $20,000 |
Cost base | $570,000 |
Sale price (contract signed March 2027) | $750,000 |
Capital gain | $180,000 |
50% discount (held more than 12 months) | minus $90,000 |
Net capital gain added to Sam's income | $90,000 |
Sam does not pay $90,000 in tax. The $90,000 is added to Sam's taxable income for 2026-27, and the tax depends on what else Sam earned that year. This is why the year of sale can make a real difference. A gain that lands in a low-income year is taxed at lower rates.
Exemptions and concessions
Main residence exemption. The home you live in is generally exempt from CGT, including up to 2 hectares of land around it, as long as you lived in it for the whole time you owned it and did not use it to earn income. If you rented out part of it or ran a business from it, you may only get a partial exemption. The 2027 changes do not affect this: your main residence remains exempt.
The six-year rule. If you move out of your home and rent it out, you can keep treating it as your main residence for up to six years, as long as you don't claim another property as your main residence over the same period. If you move out and don't rent it out, there is no time limit.
Inherited property. CGT usually applies when you sell an inherited property, not when you inherit it. Whether you pay, and how much, turns on dates:
If the person who died acquired the property before 20 September 1985 (when CGT started), your cost base is the property's market value on the date of death.
If they acquired it on or after 20 September 1985, your cost base is generally their cost base. The exception is a property that was their main residence and was not earning income just before they died, where your cost base is the market value at the date of death.
A dwelling can be fully exempt if the sale settles within two years of the death and it qualifies (for example, it was the deceased's main residence and not earning income just before they died). The ATO can extend the two years in some cases, such as when a will is contested.
Foreign residents. If you are a foreign resident for tax purposes when you sell, you generally can't claim the main residence exemption, and you can't use the 50% discount for any period you were a foreign resident.
Small business concessions. Business owners selling property used in their business may qualify for the small business CGT concessions. They are unchanged by the 2027 reforms, but the conditions are strict and need an accountant.
What changes on 1 July 2027
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 became law on 26 June 2026. For individuals, trusts and partnerships it:
replaces the 50% CGT discount with cost base indexation for gains accruing from 1 July 2027. Indexation increases your cost base in line with inflation, so you are taxed on the "real" gain above inflation.
applies a 30% minimum tax rate to capital gains accruing from 1 July 2027
keeps the 50% discount for gains that accrued before 1 July 2027, so a property you already own is treated under the old rules for the years up to that date and the new rules after it
lets owners of new residential property choose either the 50% discount or indexation and the minimum tax
leaves the main residence exemption in place
Separately, from 1 July 2027 negative gearing on residential investment property is limited to new builds, with exceptions.
If you are planning a sale around mid-2027, the date you sign the contract matters, and so does how the gain is split between the two periods. Talk to your accountant before you list. The ATO is still publishing detailed guidance.
The clearance certificate: the CGT step every Queensland seller needs
This is the part of a sale where tax and conveyancing meet, and it catches out people who have never heard of it.
Since 1 January 2025, when anyone sells property in Australia, the buyer must withhold 15% of the purchase price and pay it to the ATO, whatever the property's value. This is called foreign resident capital gains withholding. It is aimed at foreign residents, but it applies to every seller unless they give the buyer an ATO clearance certificate at or before settlement.
Australian residents apply to the ATO for a clearance certificate. It is free.
Apply early. A clearance certificate can take up to 28 days to issue. Many people apply before they list.
It lasts 12 months from the date of issue, as long as your residency doesn't change.
Every owner needs one. If a property is jointly owned, each seller needs their own certificate.
If you miss it, 15% of the price is withheld at settlement, and you only get it back after you lodge your tax return. On a $750,000 sale, that is $112,500 you can't use to buy your next home.
Your conveyancer or property lawyer will ask for the certificate as part of the sale. SearchX Legal handles conveyancing for Queensland sellers and buyers, including this step.
Keep the right records
The ATO expects you to keep records that prove your cost base and your gain for at least five years after the sale. Keep:
the purchase and sale contracts
stamp duty and legal fee statements from the purchase and the sale
invoices for capital improvements
agent and advertising invoices
for inherited property, the date of death and any valuation
Without records, you can't include those costs in the cost base, and your gain (and tax) goes up.
Other taxes when you sell
CGT is only one of the costs of selling. For agent fees, legal fees and the other costs that come out of the sale price, see our guide to the costs of selling a property. For land tax, stamp duty and council rates, see property tax in Queensland.
Frequently asked questions
Do I pay capital gains tax when I sell my home in Queensland?
Generally no. Your main residence is exempt if you lived in it the whole time you owned it and didn't use it to earn income. If you rented it out or moved out, the six-year rule or a partial exemption may apply.
How much is capital gains tax on a property?
There is no flat rate. You work out the gain (sale price minus cost base), subtract any capital losses, apply the 50% discount if you are eligible, and add the result to your income for the year. It is taxed at your marginal rate along with the rest of your income.
Do I need a clearance certificate to sell my house?
Yes, if you are an Australian resident and want to receive the full sale price at settlement. Without one, the buyer must withhold 15% of the price and pay it to the ATO. Apply early, because it can take up to 28 days.
What changes to capital gains tax on 1 July 2027?
For individuals, trusts and partnerships, the 50% discount is replaced with cost base indexation and a 30% minimum tax on gains that accrue from 1 July 2027. Gains that accrued before that date still get the 50% discount. Your main residence remains exempt.
Is there a separate Queensland capital gains tax?
No. CGT is a federal tax administered by the ATO. Queensland state taxes on property include transfer duty (stamp duty) and land tax.
This guide is general information, not tax or financial advice. CGT depends on your circumstances, and the 2027 changes are new. Talk to your accountant or a registered tax agent before you sell.