After the Budget speech, let’s take a look at how Australia ranks compared to the rest of the world for capital gains tax.
In case you’ve been under a rock, from 1 July 2027, Australia will replace the 50 per cent capital gains tax discount with cost-base indexation and a 30 per cent minimum tax on real capital gains.
The “minimum” tax in particular shifts where Australia sits in the international ranking table on capital gains tax. For any taxpayer earning at or below the 30 per cent marginal rate, the floor introduced by the new rules now exceeds the headline capital gains tax rate of countries including the United States, the United Kingdom, Spain, Germany, Italy, Austria, and the Czech Republic.
The top 10 highest capital gains tax rates in the world
On a general headline-rate basis, based on PwC’s Worldwide Tax Summaries, the Tax Foundation’s 2026 European data and the OECD’s most recent capital gains tax working paper, the highest CGT rates currently applied broadly to share and asset sales among major economies sit as follows.
| Rank | Country | Top headline CGT rate | Notes |
|---|---|---|---|
| 1 | Denmark | 42% | Top tier; lower 27 per cent rate applies up to DKK 79,400 |
| 2 | Norway | 37.8% | Effective rate via 22 per cent base multiplied by 1.72 |
| 3 | Netherlands | 36% | Deemed return on net wealth above EUR 59,357 |
| 4 | France | 34% | 30 per cent flat plus 4 per cent exceptional contribution for high earners |
| 5 | Finland | 34% | 30 per cent up to EUR 30,000, 34 per cent above |
| 6 | Ireland | 33% | EUR 1,270 annual exemption |
| 7 | Spain | 30% | Top tier on savings income |
| 8 | Sweden | 30% | Flat rate on capital income |
| 9 | Latvia | 28.5% | 25.5 per cent base plus 3 per cent high-earner surcharge |
| 10 | Austria | 27.5% | Flat rate |
Higher rates exist in narrow asset categories. South Korea applies up to 45 per cent on registered real property. Japan applies 39.63 per cent on real property gains, but only 20.315 per cent on share sales. Chile, Turkey and Uganda apply 40 per cent rates on specific categories. These are not general headline rates and are not included in the table above, but they explain why some other rankings put Asia higher.
Where Australia ranks before and after the Budget
Australia’s existing capital gains tax has worked differently to most countries on that list. It is not a flat rate. It is the taxpayer’s marginal income tax rate applied to the gain after a 50 per cent discount for assets held more than 12 months. At the top marginal rate of 47 per cent, including the Medicare levy, the effective top capital gains tax rate has been 23.5 per cent. That placed Australia roughly 14th to 16th on a global headline-rate basis. Australia sat above the United States, the United Kingdom and Canada, but well below the European top end and the Asian real-property outliers. Comfortably mid-pack.
From 1 July 2027, the picture changes in two different directions depending on which question is being asked.
On the top-rate view, the position improves slightly. Treasury’s own analysis in the Negative Gearing and Capital Gains Tax Reform Explainer shows that an investor on the top marginal rate of 47 per cent holding ASX 200 shares for 10 years at the historical average return of 4.3 per cent would face an effective rate of 20.7 per cent under the new indexation regime, compared with 23.5 per cent under the previous 50 per cent discount. By that measure, Australia slips slightly down the rankings to around 16th or 17th. Long-term diversified share investors at the top rate are marginally less taxed than before.
On the floor-rate view, the position changes entirely. The new 30 per cent minimum tax on real capital gains is the bottom of the range for any taxpayer whose effective rate would otherwise sit below 30 per cent. Recipients of the Age Pension and JobSeeker are exempt; everyone else who realises a capital gain pays at least 30 per cent on the post-indexation gain. That 30 per cent floor exceeds the entire headline capital gains tax rate in Spain (30%), Sweden (30%), Latvia (28.5%), Austria (27.5%), Germany (26.4%), Italy (26%), Estonia (22%), Iceland (22%), the United Kingdom (20-24%) and the United States (20%). It exceeds the entire CGT rate in over 25 countries.
Put another way, Australia has not moved its top capital gains tax rate. It has installed a globally-high floor.
Australia is now the only major OECD jurisdiction whose capital gains tax combines three features: marginal-rate taxation, inflation-adjusted (real) gains, and a 30 per cent minimum floor. Most other countries apply a flat headline rate to nominal gains. It makes a straight-up comparison trickier, but not impossible for the sake of water-cooler/coffee cart discussion today.
Treasury itself flags this in the explainer it issued on Budget night:
“Headline tax rates applying to nominal and real gains are not directly comparable,” the document states. The same passage notes that effective rates on nominal returns under the new Australian arrangements could have been “in the order of 20 to 30 per cent for someone on the top marginal tax rate” over the past 20 years, “though in some cases the effective rate could be higher where real returns are large.”
This article does not take into account the investment objectives, financial situation or particular needs of any individual. It does not constitute formal advice. Readers should consult a licensed financial adviser before making investment decisions based on the information set out above.
