If you're selling the home you've lived in the whole time you've owned it, the tax news is good: you generally won't pay capital gains tax (CGT) on the profit. That's the main residence exemption, and it applies if the home is on 2 hectares or less, you haven't used it to earn income and you're an Australian resident.

If you're selling a rental or a holiday home, you'll usually pay CGT on the profit. It's part of your income tax, so there's no flat rate. The gain is added to your income for the year you sign the contract, and the tax depends on the size of the gain and your other income.

Under the current rules, the gain is generally halved if you've owned the property for at least 12 months and you're an Australian resident. That changes for gains made after 1 July 2027.

A former home you've rented out sits in between. It may be fully or partly exempt, depending on how long it was rented and whether you've had another main residence since.

A few other things apply to most sales:

• If you're an Australian resident, you'll generally need a clearance certificate from the ATO (the Australian Taxation Office). It's free and confirms you're not a foreign resident. Without it, the buyer must hold back 15 per cent of the price at settlement, the day ownership passes to them.
• The buyer generally pays stamp duty, not you.
• GST only applies to some sales, such as new homes or commercial property sold by someone who's registered for GST or required to be.
• Land tax isn't a tax on selling, but there's paperwork at settlement in some states, and any land tax owing on a rental or holiday home needs to be cleared or adjusted.

This guide explains the rules as the ATO and state revenue offices set them out, and it isn't tax advice.

Which taxes apply to your sale?

It depends mostly on how you've used the property.

Do you have to pay capital gains tax when you sell a house?

Generally no, if the house has been your main residence for the whole time you've owned it, you haven't used it to earn income, and it's on 2 hectares of land or less.

You also generally need to be an Australian resident for tax purposes when you sell. If you're a foreign resident at that point, you generally can't use the exemption.

There's a limited exception if you've been a foreign resident for a continuous period of 6 years or less. To qualify, one of these must have happened in that time: you, your spouse or your child under 18 had a terminal illness, your spouse or your child under 18 died, or the sale follows a formal agreement after your relationship broke down.

There's no minimum time you have to live in a home for it to count. The ATO looks at whether it was genuinely your home: did you and your family live there, move your belongings in, have your mail sent there and use the address on the electoral roll?

You may pay CGT on part of the gain if:

• you rented out the home, or part of it, or used part of it to run a business (working from home occasionally doesn't count)
• it wasn't your home for the whole time you owned it, such as a rental you later moved into
• the land is bigger than 2 hectares

If you moved out and rented your home, you can usually choose to keep treating it as your main residence for up to 6 years while it's rented, as long as you don't treat another home as your main residence in that time.

If you first rented it out after 20 August 1996, and you'd have been fully exempt until then, its market value at that point usually becomes its cost for working out the taxable part of the gain. That's why the ATO says to get a valuation when you first rent out your home.

Our guide to the 6-year rule also covers inherited homes and partial exemptions. The ATO's property exemption tool estimates how much of your gain is exempt.

How much tax do you pay when you sell a house?

If CGT applies, the tax depends on the size of your gain and your other income that year. Here's how it's worked out, step by step.

1. Work out your capital gain. It's the sale price less the cost base, which is roughly what the property has cost you in total. That includes the purchase price, the costs of buying and selling (such as stamp duty, legal fees and your agent's commission) and money spent improving the property.

On a rental, you can't add anything you've claimed, or could claim, as a tax deduction. That means repairs and maintenance you can deduct don't also go in the cost base.

On top of that, deductions you've claimed, or could have claimed, for the cost of the building itself (capital works deductions) generally come off the cost base. Our guide to what's tax deductible when selling an investment property shows where each cost goes.

If you co-own the property, each owner's gain follows their share.

2. Take off any capital losses. If you've sold something else for less than it cost you, such as shares, that capital loss reduces your capital gain. Capital losses can only be used against capital gains, never your wages or other income, and any you can't use carry forward with no time limit.

3. Halve it, if you qualify. Under the current rules, if you're an Australian resident and you've owned the property for at least 12 months, only half your capital gain is taxed. This is the 50 per cent CGT discount, and it halves the gain, not the tax bill.

If you've been a foreign or temporary resident while owning the property, the discount may be reduced or lost. And if your home was first rented out less than 12 months before you sell, the part of the gain that's taxable because it was rented generally can't be halved.

4. Add it to your income. What's left goes into your taxable income for the financial year you sign the contract, not the year of settlement. It's taxed at your marginal rates (the rate for each band of your income), generally plus the 2 per cent Medicare levy.

A large gain can push part of your income into a higher tax band.

This is a made-up example to show the steps. It leaves out depreciation and isn't tax advice.

Say you've always been an Australian resident and you sign a contract in 2026–27 to sell a rental you own alone for $800,000. You've owned it for 5 years and never lived in it, and its cost base is $600,000, including buying and selling costs.

Your capital gain is $200,000. With no other capital gains or losses, half of it, $100,000, is added to your income for that year and taxed at your marginal rates.

Our guide to tax on selling an investment property shows the tax on a $100,000 or $300,000 gain at different incomes, the 2026–27 rates and how depreciation changes the gain.

What changes from 1 July 2027?

If you sign a contract from 1 July 2027, the part of your gain made after that date generally won't be halved. The part made up to 1 July 2027 keeps the current rules, and if you sign before then, the changes don't affect your sale at all.

Instead, the starting point for that later part of your gain is the property's value at 1 July 2027 (or its cost, if you buy later), increased in line with inflation. That means you're taxed on growth above inflation.

This applies if you've owned the property for at least 12 months and haven't been a foreign or temporary resident since 1 July 2027 (or since you bought it, if later).

A minimum 30 per cent tax can also apply to that part of the gain. It's a top-up if the tax on it would otherwise be lower, mainly in a year when your other income is low. It doesn't apply in a year you receive certain government payments, such as the Age Pension or JobSeeker.

The first stage of the changes became law in June 2026, and the government is still settling some details. Here's what the changes mean for some common cases:

• Your home: the main residence exemption isn't changing.
• Eligible new homes: if you own one, you can choose to keep the 50 per cent discount, and approved affordable rental housing can keep a discount of up to 60 per cent. Exactly which homes count as new isn't final yet. A bill setting out the definition was introduced to Parliament on 14 October 2026 and hasn't yet passed.
• Property bought before 20 September 1985: it's been exempt since CGT began. Your gain up to 1 July 2027 stays exempt, but any gain from that date will be subject to CGT unless an exemption, such as the main residence exemption, applies.
• Improvements to pre-1985 property: even now, a major improvement made after 20 September 1985 can be taxed separately if its cost is above a threshold the ATO sets each year and above 5 per cent of the sale price.

If you'll still own a property on 1 July 2027, you may need its market value on that date when you eventually sell. The ATO says it will publish guidance on valuations, and its capital gains tax reform page is updated as the details are confirmed.

Do you need a clearance certificate to sell?

Generally yes, if you're an Australian resident for tax purposes, whatever the price. The certificate tells the buyer you're not a foreign resident.

Without one, the buyer must hold back 15 per cent of the price at settlement and pay it to the ATO. On an $800,000 sale, that's $120,000. It's credited against your tax when you lodge your return, and any excess is refunded.

The certificate is free, each owner on the title applies separately, and it lasts 12 months if your residency doesn't change. It can take up to 28 days, so the ATO suggests applying through its clearance certificate page as soon as you're thinking of selling.

If you're a foreign resident when you sell, the buyer generally holds back 15 per cent unless the ATO has approved a lower rate.

Is there GST when you sell property?

Generally not on an existing home, whether you lived in it or rented it out. GST generally only applies to new residential property (such as a new or substantially renovated home), commercial property and some vacant land, when it's sold as part of a business by someone registered for GST or required to be.

Even when you're selling an existing home, you must tell the buyer in writing whether they need to withhold GST (pay the GST part of the price straight to the ATO). Standard contracts usually include this notice.

A leased commercial property can be sold GST-free as a going concern (a business sold with everything needed to keep it running), if you and the buyer meet the ATO's conditions and agree in writing.

What happens to land tax when you sell?

Land tax isn't a tax on selling. It's a yearly state or territory tax on land you own, and a home you live in is generally exempt. The Northern Territory doesn't have land tax.

If you're selling a rental, a holiday home or vacant land, check that any land tax owing is cleared. In several states, unpaid land tax stays with the land after it's sold, so the buyer will want proof it's paid.

In NSW, every seller must give the buyer a land tax clearance certificate at least 14 days before settlement, even on a home. It's separate from the ATO's clearance certificate. Our guide to who pays stamp duty when selling also sets out how land tax is handled at settlement in each state and territory that has it.

Do you pay stamp duty when you sell?

Generally no. Stamp duty (also called transfer duty) is the buyer's tax, paid on top of the price.

In Queensland and South Australia, the law makes the seller liable as well, so the revenue office can pursue both of you if it goes unpaid. In practice, though, the buyer pays.

You could also owe duty yourself if you bought the property with a first home or home buyer concession and sell before you've met its conditions, such as living there for a set time. The revenue office can then ask you to repay some or all of the duty you saved.

When are the rules different?

A few kinds of sale are taxed differently, and each is worth raising with a registered tax agent early.

Renovating or building to sell. If you bought a property to renovate or develop and sell for a profit, the ATO can treat the profit as income rather than a capital gain, even for a one-off project. If it does, the 50 per cent discount doesn't apply to that profit, and GST may apply too.

If it's part of a renovation business, the main residence exemption doesn't apply, even if you lived there for a short time.

Giving a property to family. If you give a property away, or sell it to family for less than it's worth, it still counts as disposing of it for CGT.

You're generally treated as if you'd received its market value, though the main residence exemption can still apply if it was your home. The new owner usually pays stamp duty on its market value.

Property owned by a self-managed super fund. The fund, not you, pays tax on the gain, generally at 15 per cent for a complying fund (one that follows the super rules). If it has owned the property for at least 12 months, its CGT discount is one-third, not half.

A fund also generally can't buy a home from you or your relatives, so moving your own residential property into one isn't usually an option.

Before you sign: what to sort out

Some of these take weeks, so start before you sign the contract:

• Apply for your clearance certificate as soon as you're thinking of selling.
• Work out whether the property has always been your home. If it hasn't, part of the gain may be taxable.
• Gather your cost base records: the purchase contract, stamp duty and legal costs, receipts for improvements, and your selling costs.
• Know your likely contract date. It decides which financial year the gain falls in, and whether the rules from 1 July 2027 apply.
• Plan for any tax bill. The ATO suggests working out what you'll owe and setting money aside. You pay the tax after you lodge your return for that year.
• Keep your records for at least 5 years after the sale, and longer if you're carrying forward a capital loss.

A registered tax agent can work out your figures before you sign. If you're weighing up putting some of the money into super, our guide on selling an investment property to put into super explains the limits. For everything else a sale costs, see our guides to the cost of selling a house and to selling property.

Where to check the details

The rules above come from these official sources:

• Capital gains tax (ATO)
• Your main residence (home) (ATO)
• Calculating your CGT (ATO)
• Capital gains tax reform (ATO)
• GST and residential property (ATO)
• Transferring property to family or friends (ATO)
• Land tax clearance when selling (Revenue NSW)