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.