TAX TOOLS
Sell vs Borrow: CGT Calculator
The question isn't whether to sell, but when — and what it actually costs you.
Australian Investor Principle
Compare the real cost of selling an investment vs borrowing against it. The AU Capital Gains Tax rules apply to all asset classes — not just crypto.
What You'll Learn
- How the 50% CGT discount works after 12 months (all assets)
- True cost of selling vs borrowing for your marginal tax rate
- Asset-specific lending options and risk profiles
- When each strategy makes financial sense
Why This Matters
When you need cash, the default move is to sell. But selling triggers a Capital Gains Tax event — and for many Australians, that tax bill runs into tens of thousands of dollars. Borrowing against your investment lets you access liquidity without selling. This calculator helps you understand the real cost of each option across all asset classes: shares, property, crypto, gold, and more.
Selling triggers CGT. Borrowing doesn't. The cost difference can be tens of thousands of dollars — this calculator shows you which strategy wins for your situation.
The Same Rule Applies to All Assets
Calculate Your Strategy
Select your asset type, enter your details, and compare the real cost of selling vs borrowing.
Investment Details
Crypto-backed loans (e.g. Ledn, Nexo) let you borrow against BTC/ETH without selling. Typical LTV: 30-50%. Watch liquidation risk if price drops sharply.
Used to determine 12-month CGT discount eligibility
Total investment value today
Educational input only — not a forecast. E.g. what if there's a 50% correction?
Used to determine your marginal tax rate
How much liquidity do you need?
8–15% typical for crypto-backed loans
Results & Comparison
Enter your details and click “Calculate Scenarios” to see results
When Borrowing Makes Sense
Good Reasons to Borrow
- You expect the asset to appreciate significantly over the loan period
- You've held the asset for less than 12 months (avoid short-term CGT rates by waiting)
- You need liquidity but don't want to trigger a taxable event
- Your LTV ratio is conservative (below 30-40%) to minimise liquidation risk
- Borrowed funds will be used for income-producing investments (interest may be deductible)
When Selling Is Better
- You expect a major correction (40%+ drop) — liquidation risk is too high
- You've already held for 12+ months — the 50% CGT discount significantly reduces your bill
- Interest costs exceed the CGT you'd pay — borrowing is the more expensive option
- You want certainty and no forced-liquidation risk
- You're rebalancing or exiting the asset class entirely
The 12-Month Rule: All Assets
Understanding the Risks
Volatile Collateral Risk
If your collateral drops in value, the lender may issue a margin call or liquidate your holdings automatically. This applies to crypto, shares, and ETFs pledged against loans.
- Keep LTV ratio low — 20-30% is conservative for volatile assets
- Maintain cash reserves to top up collateral if needed
- Set price alerts well above the liquidation threshold
- Choose lenders with margin-call warnings rather than automatic liquidation
Regulatory & Licensing Risk
Not all lenders accepting investment collateral are ASIC-licensed. This risk is highest for crypto-backed loans (many providers are offshore) and lower for mainstream margin lending against ASX shares (major banks are regulated).
- Verify the lender holds an Australian Credit Licence (ACL) with ASIC
- For crypto loans — check if the provider is registered for Australian services
- Review loan terms, LTV thresholds, and liquidation procedures carefully
- Consult a tax professional before drawing down any loan
Interest Rate Risk
If interest rates rise or the loan is variable, your borrowing cost can increase beyond what the calculator shows. Always model worst-case interest scenarios before committing.
- Prefer fixed-rate loans for certainty if the rate is competitive
- Model scenarios at +2-3% higher rate than current — can you still afford repayments?
- Interest on investment loans is generally tax-deductible if funds are income-producing
Opportunity Cost
Borrowing is only better than selling if the asset appreciates. If the market moves against you, you pay both the interest and miss out on redeploying capital at a lower price.
- Run the "future value" scenario in the calculator — what if the asset drops 50%?
- Have a clear exit plan: when will you repay the loan?
- Diversify: don't use 100% of any single asset as collateral
Data Sources
Tax brackets updated for 2024-25 Stage 3 tax cuts. This calculator is for educational purposes only and does not constitute financial or tax advice.
Key Takeaways
The 12-Month Rule Is Powerful
Compare Total Costs, Not Just CGT
Always Verify Lenders
MASTER TAX STRUCTURES
Learn Which Structure Holds Your Assets
Now that you understand CGT timing, the next lever is where you hold your assets. SMSF, Trust, Company, and Personal all have different tax rates — some pay zero CGT in pension phase.
The next lever is where you hold your assets. Learn about SMSF, Trust, Company structures.
Master Tax Structures →