50% CGT Discount
A 50% reduction in capital gains for individuals and trusts who held the asset for at least 12 months before disposal.
The 50% CGT discount allows eligible individuals and trusts to reduce their net capital gain by half when they have held a CGT asset for at least 12 months before the CGT event (e.g., sale or disposal). This means only 50% of the net capital gain is added to your assessable income and taxed at your marginal rate. Complying superannuation funds receive a one-third (33.33%) discount instead, and companies are not eligible for any CGT discount.
To qualify, you must have owned the asset for at least 12 months (not including the acquisition and disposal dates). The discount applies after you have offset any available capital losses against your capital gains. For example, if you made a gross capital gain of $40,000 and had $10,000 in capital losses, your net gain is $30,000, and after the 50% discount, only $15,000 is included in your assessable income.
Foreign residents lost access to the 50% CGT discount for assets acquired after 7:30 pm AEST on 8 May 2012. For assets acquired before this date, transitional arrangements allow the discount to be calculated only on the portion of the gain accruing up to that date. This change significantly impacts non-residents selling Australian property or shares.
Note: under the CGT reform legislated in 2026, the 50% discount ends for CGT events occurring on or after 1 July 2027. Assets sold before that date keep the current discount rules — see the CGT reform guides for transition planning.
How it works
The 50% CGT discount only becomes available once you've held a CGT asset for at least 12 months before the CGT event that disposes of it — the acquisition date and disposal date themselves don't count towards that 12 months, so the holding period needs to genuinely exceed a year. Where it applies, only half of the net capital gain — after any capital losses have already been offset — gets added to assessable income, effectively halving the tax on the gain compared with an asset held for under 12 months. The discount rate isn't uniform across entity types: individuals and trusts get the full 50%, complying superannuation funds get a smaller one-third (33.33%) discount, and companies get no discount at all, which is one of the reasons investment structuring matters for anyone weighing up a company versus a trust or individual ownership.
In practice, the discount shows up as a deliberate decision point for anyone close to the 12-month mark on an asset they're thinking about selling — holding on for a few extra weeks to clear the anniversary of purchase can materially change the tax bill, since the alternative is having the full, undiscounted gain added to assessable income. When you do lodge the return, the discount is applied after any capital losses for the year have already reduced the gross gain, so the order of operations — losses first, discount second — affects the final assessable amount.
Foreign residents lost access to the discount for CGT assets acquired after 7:30pm AEST on 8 May 2012, which matters for anyone who became a non-resident partway through owning an asset — transitional rules allow the discount to still apply to the portion of the gain that accrued before that date, with the remainder calculated without it. Looking further ahead, legislated CGT reform removes the 50% discount entirely for CGT events happening on or after 1 July 2027, so an asset sold before that date still gets the current treatment while a sale after it will not — worth factoring into any disposal planned around that date.
Example: discount on a $15,000 gain held 18 months
You sell an investment asset for a gross capital gain of $15,000, having owned it for 18 months with no capital losses to offset in the year.
Because the holding period comfortably exceeds 12 months, the 50% discount applies, so only $7,500 is added to your assessable income for the year — compared with the full $15,000 if the asset had been sold before the 12-month mark.
Calculate it yourself
Open calculator →Related Terms
Capital Gains Tax (CGT)
Tax on the profit made from selling or disposing of an asset, such as property, shares, or cryptocurrency.
Cost Base
The total cost of acquiring and holding an asset, used to calculate the capital gain or loss on disposal.
Capital Loss
A loss made when you dispose of a CGT asset for less than its cost base — can offset capital gains but not other income.
CGT Event
A specific event that triggers a capital gains tax obligation, such as selling, gifting, or losing a CGT asset.
Foreign Resident Tax Rates
Tax rates for individuals who are not Australian residents for tax purposes — no tax-free threshold and different brackets.