Indexation
Adjusting an asset's purchase price for inflation to reduce the taxable gain.
Indexation lifts the purchase price of an asset to account for inflation over the years you held it. A higher cost means a smaller taxable gain, and so a lower tax. It no longer applies to most financial assets under current rules, though some property sales may still use it. Check the current rule for your asset.
Questions people ask
What is indexation in simple terms?
It lifts the price you originally paid for an asset to account for inflation over the years you held it. A higher cost means a smaller taxable gain, and so less tax.
Is indexation still allowed?
For most financial assets, no. It was removed from 23 July 2024. Property bought before that date may still choose between 12.5% without indexation and 20% with it. Confirm the current rule for your asset.
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