Topical cluster · Last reviewed 2026-05-01
Australian property tax
Australian property tax is governed by the Income Tax Assessment Act 1997 (and its 1936 predecessor for some carry-forward provisions). Three big mechanics dominate. Negative gearing (rental losses deductible against other income). Depreciation (Division 40 plant + equipment, Division 43 capital works). Capital gains tax (with a 50% discount on assets held over 12 months).
Each mechanic has interaction effects. Negative gearing reduces tax annually. Depreciation amplifies the gearing benefit but recaptures part of it at sale. CGT taxes the eventual gain (less recapture, less the 50% discount). The interactions decide whether a property's after-tax return is meaningfully different from its pre-tax cashflow profile.
This pillar collects the canonical guides, calculators, glossary entries, and quick Q&A pages that cover every rule. Links cite ITAA 1997 sections + ATO rulings throughout.
Long-form guides
- Negative gearing explained
The full mechanic + every ITAA 1997 section cited.
- Property depreciation schedule (Div 40 + Div 43)
DV vs straight-line, QS report ROI, recapture interaction with CGT.
- Capital gains tax when selling property
Cost base elements, 50% discount, main residence exemption, partner split.
- CGT 6-year rule explained
Keep PPOR exemption for up to 6 years while renting (s118-145).
Calculators
- Negative gearing calculator
Marginal-rate refund + Div 40 + Div 43 + CGT recapture warning.
- Capital gains tax calculator
50% discount, main residence, 6-year rule, partner split.
- Cashflow projector (10-year)
Annual tax position projected to year 10 + CGT at exit.
Glossary terms
- Negative gearing
Rental loss deducted against other income.
- Division 40 (depreciation)
Plant + equipment depreciation.
- Division 43 (capital works)
Building structure depreciation 2.5%/year over 40.
- Depreciation schedule
QS report listing all depreciable items.
- CGT 50% discount
Halves taxable gain on assets held over 12 months.
- Main residence exemption
Tax-free sale of your home (s118-110).
- Cost base
Total cost basis used for CGT calculation.
- Marginal tax rate
Rate that applies to your next dollar of income.
- Carry-forward losses
Capital + revenue losses that carry to future years.
Quick Q&A
- Do I pay CGT if I lived in it first?
- Can I claim stamp duty on my tax return?
- What is negative gearing?
- How do I claim rental property deductions?
- Repairs vs improvements (tax)?
- How much can I save with depreciation?
- Do I pay CGT on my main residence?
Main-residence exemption + 6-year rule + partial exemption rules.
- Can I use super to buy an investment property?
SMSF + LRBA mechanic + tax shape inside the fund.
- What is land tax in Australia?
State-by-state thresholds + foreign-owner surcharge + multi-state planning.
- How do I transfer property between family members?
Stamp duty + CGT + spousal rollover (s126-5) by scenario.
- Is a depreciation schedule worth it?
5-15× payback math + 2017 Div 40 restriction.
- Positive vs negative cashflow property?
Horizontal vs vertical scaling trade-off.
- When is the right time to sell?
12-month CGT-discount eligibility + when to / when-not-to framework.