CGT 50% Discount Calculator (Australia 2026)

What Is the 50% CGT Discount?

The 50% CGT discount is an Australian tax concession in section 115-25 of the Income Tax Assessment Act 1997 that lets eligible taxpayers reduce a discount capital gain by half before adding it to assessable income. To qualify, the taxpayer must be an Australian-resident individual, trust, or complying super fund, and the asset must have been held continuously for at least 12 months (technically 12 months and 1 day from acquisition to CGT event). The discount applies after capital losses are offset, not before — and complying super funds receive a smaller one-third (33.33%) discount, not the full 50%. Source: ATO — CGT Discount.

Companies are explicitly excluded — a corporate taxpayer always pays CGT (and effectively company tax) on the full gross gain. This is why investment property and long-term shares are typically held in personal names or family trusts in Australia, not in companies. Last updated: May 3, 2026.

Holding Period Test — 12 Months and 1 Day

The 12-month rule under section 115-25 measures from the date of acquisition (when you became the owner under the contract for the original CGT asset) to the CGT event date (typically the date the disposal contract is signed, not settlement). The discount is unavailable even if you miss by a single day. Beware of CGT event K3 (asset becomes trading stock), CGT event H1 (payment received for an option), and the various roll-over interactions that can reset or preserve the holding period — pre-acquisition planning matters as much as the disposal date.

For inherited assets passing through deceased estates, special rules in Subdivision 128-A let the beneficiary inherit the deceased's holding period and original cost base for pre-CGT assets (acquired before 20 September 1985), or the deceased's cost base for post-CGT assets. This means a beneficiary can sell shortly after inheriting and still qualify for the 50% discount if the deceased held the asset for more than 12 months.

Discount Method vs Indexation Method (Pre-21 Sep 1999)

For assets acquired before 11:45 am AEST on 21 September 1999, taxpayers can choose between two methods: the 50% discount method or the indexation method. The indexation method scales the cost base up by the CPI factor frozen at 30 September 1999 (CPI 123.4), then taxes the full inflation-adjusted gain at the marginal rate. The discount method ignores inflation but halves the nominal gain. Generally, indexation wins when inflation between purchase and 30 September 1999 was very high relative to nominal price growth; the 50% discount wins for assets that appreciated strongly in real terms after September 1999.

For any asset acquired on or after 21 September 1999, the indexation method is unavailable — only the 50% discount applies (or no discount for companies). Most current investors will not use indexation, but it remains valuable for legacy holdings of pre-September 1999 real estate and shares. The tool above flags when indexation is potentially available.

Foreign and Temporary Resident Restrictions

Foreign and temporary residents lost access to the 50% CGT discount on capital gains accruing after 8 May 2012, under the Tax Laws Amendment (2013 Measures No. 2) Act. The discount is now apportioned based on the days the taxpayer was an Australian resident during the holding period. A non-resident selling Australian taxable real property in 2026 generally pays CGT on the full gain (subject only to any pre-2012 component). The ATO also imposes a 12.5% foreign-resident capital gains withholding tax on the buyer of taxable real property worth $750,000 or more, separate from the actual CGT liability. Always confirm residency status throughout the entire ownership period before claiming the discount.