Australia guide
The 50% CGT discount and what changes from 1 July 2027
An Australian resident who owned an asset for at least 12 months reduces the capital gain by 50% before it is added to income, with capital losses deducted first. From 1 July 2027 that discount is replaced by cost base indexation and a 30% minimum tax rate. That is law, and it applies only to gains accruing after that date, so a 2026-27 sale is unaffected.
| Discount for individuals | 50% |
| Minimum holding period | 12 months |
| Order of operations | Losses first, then the discount |
| Complying super funds | 33.33 per cent |
| Companies | No discount |
How is the 12 month period counted?
The day of acquisition and the day of the capital gains tax event are both excluded, so the asset must be held for more than 12 clear months. For property, the relevant date is the date of the contract, not settlement, at both ends.
Ownership can sometimes be inherited for this purpose: an asset acquired through a deceased estate, or through a relationship breakdown, can count the earlier period of ownership towards the 12 months.
In what order are losses and the discount applied?
Capital losses, including losses carried forward from earlier years, are deducted from capital gains before the discount is applied. Applying the discount first would waste half of every loss, so the order matters. Where there is a choice, losses are best applied against gains that do not qualify for the discount.
When is the discount not available?
It does not apply where the asset was held for less than 12 months, where the taxpayer is a company, or where a home was first used to produce rental or business income less than 12 months before it was sold. Foreign and temporary residents lost the full discount for gains accruing after 8 May 2012, and may receive only an apportioned discount for periods of Australian residency.
What is changing from 1 July 2027?
The 2026-27 Federal Budget replaced the flat discount with cost base indexation, so that only real gains above inflation are taxed, together with a minimum 30% rate. The measure was enacted in June 2026 and applies to individuals, trusts and partnerships from 1 July 2027.
Gains arising before 1 July 2027 keep the current discount. The measure is an announcement and has not been legislated, so this site continues to apply the current law and will update the rate file when the legislation passes.
Worked example: an investment property held six years
| Sale price | $900,000 |
| Less cost base | −$600,000 |
| Capital gain | $300,000 |
| Less 50% discount | −$150,000 |
| Net capital gain added to income | $150,000 |
| Income tax on the gain | $57,850 |
| Medicare levy on the gain | $3,000 |
| Estimated tax | $60,850 |
An owner with $100,000 of other taxable income, using the 2026-27 resident rates.
Try your own figures in the Australia capital gains tax on property calculator.
Common questions
How does the 50 per cent CGT discount work?
An Australian resident individual who held the asset for at least 12 months halves the capital gain before it is added to taxable income. Capital losses are deducted before the discount is applied.
Is the CGT discount being abolished?
Yes, from 1 July 2027, and this is law rather than a proposal. The 2026-27 Budget measure was enacted in June 2026 and replaces the discount with cost base indexation and a 30% minimum tax rate for individuals, trusts and partnerships. It applies only to gains accruing after 1 July 2027, so a sale in 2026-27 keeps the 50% discount.
Does the discount apply to a property held for 11 months?
No. The asset must be held for more than 12 months, counted from the contract date of purchase to the contract date of sale, excluding both days.
Can a company claim the discount?
No. Companies cannot use the discount. Complying superannuation funds receive a reduced discount of 33.33 per cent, and trusts receive 50 per cent.
This is an estimate for general information only, not tax, legal or financial advice. Tax rules are complex and depend on your circumstances, and figures may not reflect the latest changes. Confirm your position with Australian Taxation Office (ato.gov.au) or a qualified tax adviser before acting. The terms of use set out the limits of this estimate and of our liability.
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More guides
Sources
- CGT discount (50 per cent for individuals, 12-month rule)
- Tax rates, Australian resident (2026-27 table)
- What is the Medicare levy?
- Treating former home as main residence (six-year rule)
- Using your home for rental or business (partial exemption by days)
- Budget 2026-27, Tax reform (CGT discount changes from 1 July 2027)