What counts as a collectable?
Capital gains tax (CGT) does not apply only to major assets such as real estate, farms or shareholdings. It also applies to a specific class of personal use assets known as “collectables”. These items are defined under tax law as assets “used or kept mainly for your personal use or enjoyment”.
Collectables include artwork, jewellery, antiques, coins or medallions; rare folios, manuscripts or books; and postage stamps or first‑day covers.
Important tax rules
To be treated as a collectable, the asset must have cost more than $500. Items acquired for $500 or less are exempt from CGT as collectables, subject to anti‑avoidance rules designed to prevent manipulation of this threshold.
A key feature of collectables is the treatment of capital losses. If you make a capital loss on a collectable, that loss can only be offset against capital gains from other collectables. It cannot be applied against gains from shares, real estate or other investments, nor can it be offset against your ordinary income.
Inherited jewellery or similar items retain their character as collectables.
Mistakes people often make
Some people acquire collectables for the purpose of trading. In these cases, CGT rules do not apply. Instead, profits are treated as assessable business income.
Another common trap is assuming inherited items are exempt from CGT. In reality, inherited collectables retain their classification and may trigger CGT on disposal.
Recent CGT reforms
The 2026 Budget CGT reforms apply to collectables. You will need to determine their market value at 30 June 2027 (or use the new apportionment method) to apply the CGT discount up to that date. After 30 June 2027, the new indexation method applies.
How to protect your position
If you own valuable collectables — or plan to buy or sell them — understanding their CGT treatment is essential. The rules are strict, losses are quarantined, and upcoming reforms may affect how gains are calculated.
When to seek advice
If you are dealing with collectables, especially valuable items, seek advice before selling or acquiring them.
