Capital gain is a crucial concept for any Australian looking to build wealth through property, shares, crypto, or even collectibles. With major tax updates coming into play in 2025, understanding how capital gains are taxed—and how you can minimise your bill—has never been more important. Whether you’re a seasoned investor or just getting started, here’s what you need to know about capital gain in Australia right now.
What Is Capital Gain—and Why Does It Matter in 2025?
In simple terms, a capital gain is the profit made when you sell an asset for more than you paid. Typical assets that attract capital gains include:
- Investment properties
- Shares and ETFs
- Cryptocurrencies
- Collectibles and artwork (if valued over $500)
The Australian Taxation Office (ATO) requires you to report capital gains (or losses) when you lodge your annual tax return. In 2025, the rules have shifted for both individuals and trusts, with new thresholds and reporting requirements.
2025 Policy Updates: What’s Changed for Capital Gains Tax?
This year, the federal government’s focus on housing affordability and tax fairness has brought several changes that impact capital gains tax (CGT):
- Reduced CGT Discount for Certain Assets: The 50% CGT discount for assets held over 12 months remains, but there are tighter eligibility rules for trusts and non-residents.
- Crypto Reporting Crackdown: All major crypto exchanges are now required to report user transactions directly to the ATO. If you’ve made gains from trading Bitcoin, Ethereum, or altcoins, expect greater scrutiny and automated pre-filling in your tax return.
- Property Investor Watch: The government is considering reducing CGT concessions for investment properties, especially for newly acquired dwellings. Keep an eye on mid-year budget announcements for further changes.
- New Reporting Platform: The ATO launched an updated myGov portal in 2025, making it easier (and mandatory) to report all capital gains events, including those from overseas assets.
These changes are designed to close loopholes, improve tax compliance, and ensure high-value assets are properly taxed. If you’re an investor, it’s vital to stay on top of these updates to avoid penalties and optimise your after-tax returns.
Real-World Examples: How Capital Gains Affect Different Investors
1. Selling an Investment Property
Imagine you purchased an apartment in Brisbane for $600,000 in 2020 and sold it for $820,000 in early 2025. After deducting eligible costs (stamp duty, agent fees, capital improvements), your capital gain is $180,000. If you’ve owned the property for more than 12 months, you may be eligible for the 50% CGT discount, reducing your taxable gain to $90,000. This amount is then taxed at your marginal tax rate.
2. Trading Shares or ETFs
Suppose you invested $10,000 in an ASX-listed ETF in 2023 and sold it for $15,000 in 2025. The $5,000 gain is subject to CGT, with the potential for a 50% discount if held over a year. Remember, frequent trading can reclassify your activity as ‘trading’ rather than ‘investing’, which may affect how gains are taxed.
3. Crypto Gains and Losses
With the ATO’s tighter reporting in 2025, digital asset investors face greater visibility. If you bought $2,000 worth of Ethereum and sold it for $8,000, you’d declare a $6,000 capital gain. Losses from other crypto trades can be used to offset gains, reducing your overall tax bill, but cannot be used to reduce ordinary income.
Smart Strategies to Manage Capital Gains in 2025
- Time Your Sales: Holding assets for over 12 months usually unlocks the 50% CGT discount for individuals. Plan your sales accordingly.
- Offset with Losses: If you’ve made losses on other investments, you can offset these against your gains to lower your taxable amount.
- Keep Detailed Records: The ATO’s digital reporting means you need accurate, up-to-date records of purchase and sale prices, holding periods, and transaction costs.
- Be Aware of Policy Shifts: With the government’s ongoing review of property and trust concessions, stay alert to announcements that could affect your investments.
- Maximise Deductions: For property investors, ensure you claim all eligible capital costs (renovations, legal fees) to reduce your gain.
Remember, tax is just one piece of the puzzle. A holistic investment strategy considers after-tax returns, market trends, and your long-term goals.
The Bottom Line: Capital Gains in 2025
Capital gains remain one of the most significant tax events for Australian investors. With 2025 bringing tighter reporting, potential changes to discounts, and a focus on digital assets, staying informed is your best defence—and your biggest opportunity. Whether you’re selling property, shares, or crypto, understanding the rules will put you in the driver’s seat for smarter, more profitable decisions.
