Zero Capital Gains Rate in Australia: Policy Prospects & Impact in 2025

Imagine selling your family investment property or shares and keeping every dollar of profit—no tax, no paperwork, just pure gain. The idea of a zero capital gains rate is gaining traction in policy circles and investor forums alike as Australia faces shifting economic winds in 2025. But what would this mean for everyday Aussies, the property market, and the national budget?

The Current State of Capital Gains Tax in Australia

Australia’s capital gains tax (CGT) is not a separate tax, but profits from the sale of investments (like shares, property, or crypto) are added to your assessable income and taxed at your marginal rate. There are some key features:

• 50% Discount: If you hold an asset for more than 12 months, individuals and trusts can reduce their capital gain by 50% before tax is applied.
• Superannuation Funds: Funds enjoy a 33.3% discount on assets held longer than a year.
• Exemptions: Your primary residence is typically exempt, but investment properties and shares are not.

With property and share prices rebounding in 2025, many Australians are set to realise significant gains, making CGT more relevant than ever.

What Would a Zero Capital Gains Rate Look Like?

The concept is simple: eliminate tax on profits from the sale of investments. In practice, it could take several forms:

• Complete abolition of CGT for individuals, trusts, and companies.
• Targeted zero rates for certain assets (e.g., startups, green investments, or first-home buyers selling their first property).
• Time-limited zero rates to encourage investment during periods of economic slowdown.

Internationally, countries like New Zealand have no broad-based CGT, while others (like Singapore) offer zero or reduced rates for long-term investments. The debate in Australia has heated up as policymakers look to spur economic growth and attract global capital in a post-pandemic environment.

Economic Pros and Cons: Who Wins and Who Loses?

Adopting a zero capital gains rate would have far-reaching implications:

Winners

• Everyday investors could see greater returns and more flexibility in managing their portfolios.
• Startups and small business owners might find it easier to attract venture capital, as investors would keep more of their exit profits.
• Retirees and super funds could benefit from higher after-tax returns, supporting better retirement outcomes.

Losers

• The Federal Budget would take a hit—CGT raised over $20 billion in 2023-24, funding schools, hospitals, and infrastructure.
• Property affordability could worsen if investors flood the market, driving up prices further.
• Wealth inequality may widen, as wealthier Australians are more likely to own assets that attract capital gains.

Some economists argue that zero CGT could increase economic dynamism, while others warn it might encourage speculation and short-termism, undermining market stability.

Policy Updates and the Road Ahead in 2025

While no major party has tabled a zero CGT bill, the idea is on the radar. The Federal Treasury’s 2025 review of Australia’s tax system is examining the efficiency and fairness of existing CGT rules. There is mounting pressure from business groups and some crossbench senators to consider targeted CGT relief for startup founders and green investment projects.

At the same time, the Albanese Government is focused on housing affordability and closing tax loopholes, making a blanket zero CGT rate unlikely in the short term. However, the conversation is not going away—especially as Australia seeks to stay competitive in a region where capital is increasingly mobile and tax competition is fierce.

Investors should stay alert to policy developments, as any CGT changes will have major implications for portfolio strategy, property investment, and superannuation planning in the years ahead.