If you’re thinking about selling an investment property, shares, or any other asset before the end of the financial year, the date you sign the contract could be the most important financial decision you make. Capital gains tax planning isn’t just about how much you earn from a sale — it’s about which financial year that gain lands in, and whether you’ve set yourself up to minimise what the ATO takes.
When does a CGT event actually happen?
Most people assume the capital gain is recorded when money hits their bank account — that is, at settlement. In most cases, that’s incorrect. For property and shares, the CGT event is triggered at the date of contract exchange, not settlement. This means if you exchange contracts on 28 June 2026 but settle on 14 July 2026, the gain belongs to the 2025–26 financial year, not 2026–27. Getting this wrong can lead to an unexpected tax bill — or a missed planning opportunity.
The 12-month discount rule
One of the most valuable concessions available to individual investors is the 50% CGT discount. If you’ve held an asset for more than 12 months before the CGT event, only half the capital gain is included in your taxable income. For example, if you make a $100,000 gain on an asset you’ve held for 14 months, only $50,000 is added to your income. If you sell before the 12-month mark, the full $100,000 is assessable. So before you sign anything, check your purchase date carefully — waiting a few extra weeks to cross that 12-month threshold could save you tens of thousands of dollars. Of course this discount will soon be removed and replaced with a new method and keep a watch out for the new rules when we post them.
When it makes sense to sell before 30 June
Timing a sale before 30 June can work in your favour in some situations. If you have capital losses from other investments sitting unused, crystallising a capital gain this financial year allows you to offset those losses and reduce or eliminate the tax payable. Similarly, if your income this year is unusually high and you expect it to drop next year — perhaps because you’re winding back work or a business has had an exceptional year — bringing a gain forward into the current year may not make sense at all. Consider both sides carefully.
When delaying until after 30 June is smarter
If you expect to have a lower income in 2026–27 — perhaps due to retiring, reducing work hours, or a business slowdown — delaying the exchange of contracts until after 30 June pushes the gain into that lower-income year. Even a modest drop in your marginal tax rate can translate to a significant tax saving on a large gain. The same logic applies if you’re sitting on both gains and losses across different assets: properly timing each sale can let you use losses to offset gains more efficiently across the two financial years.
Talk to us before you sign
The most common and costly mistake in CGT planning is acting first and asking questions later. Once you’ve exchanged contracts, the financial year is locked in. A conversation before you sign can make a substantial difference to your tax position. We can model the scenarios for you — factoring in your total income, any existing capital losses, the 12-month discount, and your expected income next year — so you go into the sale with a clear picture of what to expect.
If you’re considering selling an asset before or after 30 June, please get in touch with us before you exchange contracts — the timing can make a significant difference to the tax you pay.
