*A capital gain (or loss) is the difference between the cost price and the selling price of a good or service.*

## The Formula

Capital gain

#### Example 1

**Rachel purchased a house two years ago for $390,000. She decides to sell her property and she gets $420,000 at the auction. At the time of her purchase, Rachel had solicitor’s fees, moving costs and duty which totalled $6,200. Her agent and solicitor have charged Rachel a combined cost of $6,800 to sell the property.**

**a) Calculate the capital gain (ignore the additional costs) and express this gain as a percentage of the purchase price correct to two decimal places.**

Capital gain

Capital gain

Capital gain

Percentage gain

Percentage gain

Percentage gain

The capital gain is $30,000 and the percentage gain is 7.69%.

#### See also

Discount

GST

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