Australia’s 50% CGT discount is one of the most significant tax concessions available to individual investors. If you hold a CGT asset for more than 12 months before selling, you only pay tax on half of the capital gain — the other half is tax-free.
Who Qualifies for the 50% CGT Discount?
| Entity | Discount Available |
|---|---|
| Individuals (Australian residents) | 50% |
| Trusts (passed to beneficiary) | 50% (for individual beneficiaries) |
| Superannuation funds | 33.3% (one-third) |
| Companies | None |
| Non-residents | None (removed from 8 May 2012 for non-residents) |
You must be an Australian resident for tax purposes at the time you dispose of the asset. Temporary residents may have limited access depending on the asset type.
The 12-Month Holding Rule
To qualify for the discount, you must have acquired the asset more than 12 months before the CGT event (typically, the date you entered into the contract of sale — not settlement).
- Acquired 1 March 2024, sold 2 March 2025 → held exactly 12 months — discount does not apply (must be more than 12 months)
- Acquired 1 March 2024, sold 3 March 2025 → held more than 12 months — discount applies
How Capital Losses Interact With the Discount
Capital losses must be applied before the 50% discount — not after. This is important: applying losses post-discount would reduce your taxable gain by less.
Example:
- Capital gain: $30,000 (held 2 years — discount eligible)
- Capital loss: $10,000
- Step 1 — apply the loss: $30,000 − $10,000 = $20,000 net gain
- Step 2 — apply the 50% discount: $20,000 × 50% = $10,000 taxable gain
If you applied the discount first and then the loss, your taxable gain would be only $5,000 — but the ATO does not allow this. Losses come first.
How the Discount Is Applied in Your Tax Return
When lodging via myTax or through a tax agent:
- Calculate your gross capital gain
- Deduct current-year and carry-forward capital losses
- Apply the 50% discount to the net eligible gain
- Include the discounted gain in your total taxable income
CGT Discount for Assets Acquired Before September 1999
For assets acquired before 21 September 1999 and held for more than 12 months, you can choose between:
- Discount method: 50% discount on the nominal gain, OR
- Indexation method: Adjust the cost base for inflation (using the CPI to the September 1999 quarter)
You choose the method that gives the better result for each asset.
Related Articles
- How to Calculate Capital Gains Tax
- CGT on Shares
- Tax-Loss Harvesting in Australia
- Capital Gains Tax Australia hub
Frequently Asked Questions
Do I automatically get the 50% CGT discount? No — you must meet the conditions (individual or trustee, Australian resident, asset held for more than 12 months) and you must apply the discount in your tax return. It is not applied automatically by the ATO.
Does the 50% CGT discount apply to investment property? Yes, provided you held the property for more than 12 months and you are an individual or trustee. Companies cannot access the discount.
Does the CGT discount apply to cryptocurrency? Yes. If you held the crypto for more than 12 months before disposing of it (including trading, selling, or using it to buy goods or services), the 50% discount may apply.
This article provides general tax information for FY2025–26. For advice tailored to your situation, speak with a registered tax agent or accountant. Find one through the Tax Practitioners Board register.