Australia’s Capital Gains Tax Discount: Who Qualifies and How It Works in November 2026

Verified November 10, 2026, at 13:09 UTC (UTC+00:00).

Australian resident individuals can generally reduce an eligible capital gain by 50% if they owned the asset for at least 12 months before the relevant capital gains tax (CGT) event. The discount applies after eligible capital losses are deducted, and the remaining net capital gain is included in assessable income.

The distinction matters for anyone selling an investment property, shares, or another asset: the discount halves the eligible gain, not the tax bill. Companies cannot use it, and different rules apply to superannuation funds, trusts, and people with periods of foreign residency.

Destaques

• Individuals generally need to be Australian tax residents and meet the 12-month ownership requirement to receive the full 50% discount.
• For a sale under a contract, the contract date generally determines the CGT event date, not settlement.
• Apply current-year and eligible carried-forward capital losses before the discount.
• Complying super funds generally receive a 33.33% discount on eligible gains; companies cannot claim the discount.

What is the capital gains tax discount in Australia?

The CGT discount reduces an eligible capital gain used to calculate your net capital gain. Australia does not generally impose a separate, flat capital gains tax rate on individuals. Instead, a net capital gain is included in assessable income and taxed as part of the individual's overall income tax calculation.

For example, a 50% discount on an eligible $20,000 gain leaves $10,000 to include in assessable income, assuming there are no capital losses or other relevant adjustments. It does not mean that the tax rate on the original gain is automatically 50%, or that the final tax bill is cut by exactly half.

The Australian Taxation Office’s calculation guide sets out the order for calculating gains, applying losses, and claiming the discount.

Who qualifies for the 50% CGT discount?

Australian resident individuals, including partners in a partnership, can generally claim a 50% discount on an eligible gain when they meet the ownership and other requirements. Trusts can also qualify, although beneficiaries face additional rules when reporting distributions. The discount is available for eligible business and non-business assets.

Complying superannuation funds generally use a 33.33% discount on qualifying gains. Companies cannot use the CGT discount. The tax treatment of a gain made through a fund or trust can therefore differ from the treatment of an asset held directly in an individual's name. See the ATO’s CGT discount guidance for entity-specific rules.

Residency is a tax question, not simply a question of citizenship. Foreign and temporary resident individuals generally cannot claim the full 50% discount for periods of foreign or temporary residency after May 8, 2012. A partial discount may be available in some circumstances, including where an asset was acquired on or before that date or the owner had a period of Australian residency afterward. The calculation can be complex; check the ATO’s guidance for foreign and temporary residents.

How does the 12-month ownership rule work?

Generally, you must own the asset for at least 12 months before the CGT event. When counting, exclude both the acquisition day and the day of the CGT event. That means it is important to check the actual dates rather than assume a transaction on the same calendar date the following year qualifies.

When an asset is sold under a contract, the CGT event generally occurs when the contract is entered into, not when settlement takes place. That date can affect both eligibility for the discount and the income year in which the gain is reported. Special ownership-period rules can apply to assets acquired through a deceased estate, a relationship breakdown, or certain rollovers. The ATO explains the counting rules and exceptions.

How do you calculate the discount after capital losses?

First, calculate the capital gain for each relevant asset using its capital proceeds and cost base. The cost base can include eligible acquisition and disposal expenses, so retain the supporting records. Then apply current-year capital losses and any eligible net capital losses carried forward from earlier years. Apply the discount to the remaining gains that qualify.

Consider this simplified example for an Australian resident individual, with all figures in Australian dollars:

1. An investment is sold for $150,000. Its eligible cost base is $100,000, producing a $50,000 capital gain.
2. The investor has an eligible $10,000 capital loss to apply, leaving $40,000.
3. The investment meets the 12-month and other discount requirements, so the 50% discount reduces that amount to $20,000.
4. The $20,000 net capital gain is included in assessable income. The final tax depends on the investor’s overall circumstances.

If you have both discounted and non-discounted gains, the ATO says you can choose which gains to offset with losses; applying losses to non-discounted gains first generally produces the lowest CGT outcome. If eligible capital losses exceed capital gains, the net capital loss can generally be carried forward indefinitely to offset future capital gains. It cannot be deducted from salary or other ordinary assessable income. See the ATO’s capital loss guidance.

Does the discount apply to a home, shares, or an investment property?

It can apply to eligible gains on shares and investment property, provided the owner and asset meet the requirements. A home that qualifies fully for the main residence exemption generally has no taxable capital gain to discount. A property used as both a home and an income-producing asset may require a partial-exemption calculation before any eligible discount is considered.

Not every sale is treated as a capital gain. For example, assets held as trading stock or gains treated as ordinary business income can be subject to different rules. Trust distributions, inherited assets, foreign residency, and small-business concessions can also make the calculation more involved.

Before selling or lodging a return, check contract dates, purchase and sale records, eligible costs, prior capital losses, and your tax residency. If the transaction involves a trust, a change in residency, or mixed use of a property, a registered tax professional can help apply the rules to the facts.

FAQ

Is the 50% discount applied to the sale price?

No. It applies to the eligible capital gain remaining after relevant capital losses, not to the entire sale price.

Can I claim the discount if I sell within 12 months?

Generally, no. The asset must meet the 12-month ownership requirement, although special rules can affect how ownership periods are counted.

Do I pay capital gains tax at a flat rate?

Generally, no. An individual’s net capital gain is included in assessable income and forms part of the overall income tax calculation.