Glossary · Australian property
CGT 50% discount.
Australian tax discount that reduces taxable capital gain by 50% on assets held by individuals (or trusts) for over 12 months.
Under ITAA 1997 s115-25, individuals and trusts that sell a CGT asset held for more than 12 months can apply a 50% discount to the capital gain before adding it to taxable income. Companies don't get the discount. SMSFs in accumulation phase get a 33⅓% discount.
The 12-month clock runs from contract-of-purchase date to contract-of-sale date (not settlement to settlement). Holding for 11 months and 30 days disqualifies. The discount is automatic, applied via the CGT return rows in your tax return.
When combined with negative-gearing, the 50% discount is the mechanic that makes long-term property investing tax-favoured: rental losses deducted at full marginal rate annually, capital gain taxed at half rate at sale.
Worked example
Bought 2017, sold 2026, gain $300K. After 50% discount, taxable amount = $150K. At 39% marginal rate, CGT = $58.5K (vs $117K without the discount).
Source
ITAA 1997 ss115-25 + 115-100.
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