Capital Gains Tax (CGT) is the tax payable on the profit made from selling an asset, like an investment property. The amount of CGT you pay depends on how long you’ve owned the property and your individual tax circumstances, as of December 2025.
Currently in Melbourne, and across Victoria, if you’ve held the property for more than 12 months, you’re generally eligible for a 50% CGT discount. This means only 50% of the capital gain is added to your taxable income. If held for less than 12 months, the full capital gain is taxable. When preparing to sell in the Eastern Suburbs, many vendors engage a quantity surveyor to determine the cost base of the property, including original purchase price, stamp duty, legal fees, and even some renovation costs. Accurately calculating this cost base is crucial. In 2026, we anticipate continued scrutiny from the ATO regarding CGT reporting, so meticulous record-keeping is vital. Fletchers’ experience across multiple generations shows that understanding these details *before* listing is key to a smooth transaction. The market in areas like Balwyn and Doncaster currently favours well-maintained properties, potentially impacting the final sale price and therefore the capital gain.
Calculating CGT can be complex, and it’s essential to seek professional advice from an accountant or tax advisor to understand your specific obligations.