CGT 50% Discount Calculator (Australia 2026)
Calculate your Australian capital gains tax with the 50% CGT discount under section 115-25 of the Income Tax Assessment Act 1997. Tests holding-period eligibility (12 months and 1 day), entity type (individuals and trusts qualify; companies do not), and compares the discount method versus the indexation method (frozen CPI to 30 September 1999) for pre-21 September 1999 acquisitions. Free, private, runs entirely in your browser.
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Source: Australian Taxation Office (ato.gov.au) — CGT Discount + ATO Indexation Method. Last updated: May 3, 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.
Frequently Asked Questions
What is the 50% CGT discount in Australia?
The 50% CGT discount under section 115-25 of the Income Tax Assessment Act 1997 lets resident individuals and trusts halve a discount capital gain before adding it to assessable income, provided the asset has been held for at least 12 months and 1 day. Complying super funds (SMSFs) get a one-third (33.33%) discount instead. Companies receive no discount and always pay the full corporate tax rate on the gross gain.
Who qualifies for the CGT 50% discount?
Australian-resident individuals and trusts qualify. Foreign and temporary residents lost access to the 50% discount on Australian taxable real property gains accruing after 8 May 2012; their discount is now apportioned by Australian-resident days during the holding period. Complying super funds get 33.33% rather than 50%. Companies are excluded entirely.
How is the 12-month holding period measured?
The holding period runs 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 requires at least 12 months and 1 day. Missing by even one day disqualifies the gain from the discount.
When can I use the indexation method instead?
The indexation method is available only for assets acquired before 11:45 am AEST on 21 September 1999. It scales the cost base up by CPI frozen at 30 September 1999 (CPI 123.4) and then taxes the full inflation-adjusted gain at marginal rates. For some long-held assets purchased in low-inflation years close to 1999, the discount method gives a better result; for very old high-inflation purchases, indexation can be cheaper.
How are capital losses applied?
Capital losses are applied BEFORE the 50% discount under Subdivision 102-A ITAA 1997. The order is: (1) sum current-year capital gains, (2) deduct current-year and prior-year capital losses, (3) apply the 50% / 33.33% discount to the net gain. This means losses absorb the full pre-discount gain, not the discounted gain — making losses more valuable than they look.
Are pre-1985 assets exempt from CGT?
Yes. Capital gains tax in Australia commenced on 20 September 1985. Assets acquired before that date are pre-CGT assets and the gain is fully exempt — but watch for CGT event K6 (capital improvements made after 19 September 1985 to a pre-CGT asset can be taxable as separate CGT assets if they exceed the relevant thresholds), and CGT event I1 / I2 if you cease being a resident.
Does the 50% discount apply to the main residence?
You don't need the 50% discount for your main residence — the main residence exemption under Subdivision 118-B fully exempts the capital gain on your principal place of residence (subject to the absence rule, partial use for income-producing purposes, and the maximum 2 hectares of adjacent land). The 50% discount is most relevant for investment properties, shares, and managed funds.