What is the 12-month CGT discount and how does it work?

Australian resident individuals who hold an asset for at least 12 months before selling can reduce their capital gain by 50% before it is taxed. For example, a $50,000 gain becomes a $25,000 assessable gain after the discount. At the 30% marginal rate, CGT falls from $15,000 to $7,500, a saving of $7,500 simply by holding longer. The 12-month clock starts on the day after acquisition and ends on the day of sale. Companies do not qualify; self-managed super funds receive a one-third discount instead.

Do I pay CGT when I sell my home?

Generally no. Your principal place of residence (main home) is exempt from CGT if it has been your primary residence for the entire ownership period and you have not used it to produce income. Partial exemption applies if you rented part of it, or if it was not your main residence for part of the period. The exemption also covers up to two hectares of adjacent land. If you sell an investment property, normal CGT rules apply and the 50% discount may reduce your liability.

How does CGT work for shares and ETFs?

When you sell shares or ETF units, any profit is a capital gain. You calculate the gain as the sale proceeds minus the cost base, the original purchase price plus brokerage. If you hold for 12+ months, the 50% discount applies. Dividend reinvestment plan (DRP) shares each have their own cost base and 12-month holding period from the date they were issued. Share traders (who buy and sell frequently as a business) are taxed on trading profits as ordinary income, not CGT.

Is cryptocurrency subject to CGT in Australia?

Yes. The Australian Tax Office (ATO) treats cryptocurrency as property, not currency. Disposing of crypto, selling it, converting it to another coin, or using it to buy goods, is a CGT event. The 50% discount applies if you held the crypto for 12+ months before disposal. Crypto-to-crypto trades are taxable events at the time of the trade, valued in AUD. If you genuinely use crypto for personal transactions under $10,000, personal use asset rules may apply, but investment holdings do not qualify.

What if I have both capital gains and capital losses in the same year?

Capital losses must first be applied against capital gains in the same year before you can apply the CGT discount. This sequencing matters: if you have a $20,000 gain from a 12-month asset and a $5,000 loss, you first reduce the gain to $15,000, then apply the 50% discount to get a $7,500 assessable gain. If you net losses after offsetting gains, the remaining loss carries forward to future years and does not expire.

Does CGT apply to assets I inherited?

Inherited assets have special CGT rules. If the deceased person acquired the asset on or after the CGT start date (20 September 1985), you generally inherit the asset at the deceased's cost base and the 12-month clock restarts from the date of death. If the deceased held the asset for 12+ months, you are immediately eligible for the 50% discount when you sell. Assets acquired before the CGT start date (pre-CGT assets) pass to beneficiaries free of CGT at their market value at the date of death.

When do I report and pay CGT in Australia?

CGT is not paid at the time of sale, it is reported when you lodge your annual income tax return for the financial year in which the sale occurred. The capital gain is added to your assessable income and taxed at your marginal rate after any applicable CGT discount. Your tax return is generally due 31 October; using a registered tax agent typically extends this deadline. If CGT significantly increases your tax liability, you may be placed on a PAYG instalment arrangement that requires pre-paying a portion of estimated future tax each quarter.

Capital Gains Tax Calculator

Estimate your Australian CGT liability including the 50% discount for assets held more than 12 months. Assumes Australian resident tax treatment.

When to use

When you've sold (or plan to sell) shares, property, crypto, or other investments and want to estimate your tax bill.

Who it's for

Australian resident investors selling personally-held assets, not through a company or trust.

What you'll need

Sale price, purchase price (cost base), asset type, how long you held it, and your taxable income bracket.

FY2026–27 ATO marginal rates and CGT rules

Asset type

CGT rules are the same for all asset types (this is for your reference only).

Purchase price

Total amount originally paid for the investment.

Sale price

Total amount received from the sale.

What is a cost base?

Your cost base is the total you paid to acquire and dispose of the investment, including eligible brokerage and fees. The calculator adds these to your purchase price automatically. See full details below.

Years held

12+ months qualifies for the 50% CGT discount, halving your taxable gain.

Additional months

50% CGT discount applies, asset held for 3 years

Marginal tax rate

Your income tax rate on the last dollar earned. The taxable gain is added on top of your other income.

Carried-forward capital losses (optional)

Any prior-year capital losses not yet used. Applied against your capital gain before the 50% discount.

Simplified estimate based on Australian CGT rules for individual residents. Does not account for main residence exemption, pre-CGT assets, rollovers, or other offsets. General guidance only — not tax advice.

Ownership Period

July 2023July 2026

3 years held, 50% CGT discount applies

The 50% CGT discount halves your taxable gain. Available to Australian resident individuals who hold an asset for more than 12 months before selling.

Estimated CGT payable

$7,500

30% marginal rate, after 50% discount

Capital gain

$50,000

$150,000 sale price minus $100,000 cost base

50% CGT discount

−$25,000

Held 3 years, half the gain is excluded from assessable income

Taxable gain

$25,000

Added to your assessable income, half the gain after 50% discount

Net proceeds after CGT

$142,500

$150,000 sale price minus $7,500 estimated tax

How this is calculated

Sale proceeds$150,000

Less cost base−$100,000

Original purchase price including all acquisition costs (brokerage, stamp duty, legal fees)

Capital gain$50,000

Total profit before concessions

Less 50% CGT discount−$25,000

Held 3 years, over the 12-month threshold, Australian residents can exclude half the gain

Taxable gain$25,000

Added to your assessable income for the year

Marginal tax rate30%

Capital gains are not taxed separately, the taxable gain is added on top of your other income and taxed at your marginal rate

Estimated CGT payable$7,500

$25,000 × 30%

50% CGT discount applied for assets held more than 12 months
Capital gain is added to your other income and taxed at your marginal rate

Where do your sale proceeds go?

$150,000 sale price breakdown — hover to see percentages

Cost base: $100,000
Net gain after CGT: $42,500
Estimated CGT: $7,500

Cost base: $100,000, Net gain after CGT: $42,500, Estimated CGT: $7,500

Capital gain allocation across sale prices

How your gain splits between tax and profit as sale price rises, 50% discount applied

Net gain after CGTEstimated CGT

Stacked area chart showing how capital gain splits between net gain and CGT across different sale prices
Period	Net gain after CGT	Estimated CGT	Total
$0	$0	$0	$0
$30k	$0	$0	$0
$60k	$0	$0	$0
$90k	$0	$0	$0
$120k	$17K	$3K	$20K
$150k	$43K	$8K	$50K
$180k	$68K	$12K	$80K
$210k	$94K	$17K	$110K
$240k	$119K	$21K	$140K
$270k	$145K	$26K	$170K
$300k	$170K	$30K	$200K

At your current sale price of $150,000, estimated CGT is $7,500. Effective CGT rate: 15.0% of the capital gain.

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Capital gains tax in Australia

How CGT works in Australia

Capital gains tax is not a separate tax; it's part of your income tax. When you sell an asset (shares, investment property, crypto, etc.) for more than you paid, the profit is called a capital gain and is added to your assessable income for that year. You then pay tax on the gain at your marginal rate. CGT only applies to assets acquired on or after 20 September 1985 (the CGT start date). Personal use assets like cars and your main home are generally exempt.

The 50% CGT discount

If you are an Australian resident individual and you hold an asset for at least 12 months before selling, you can reduce your capital gain by 50% before it is added to your income. This halves your effective CGT rate, a 30% marginal rate becomes just 15% on the gain. Companies receive no CGT discount; super funds receive a one-third discount. The discount applies to the gain after offsetting any capital losses. Timing the sale to exceed the 12-month threshold is one of the most impactful CGT strategies available.

Capital losses and carry-forward

If you sell an asset for less than your cost base, you make a capital loss. Capital losses cannot be deducted against ordinary income (salary, wages); they can only offset capital gains. If your losses exceed your gains in a given year, the net loss carries forward indefinitely and can reduce future capital gains. You must apply current-year losses before applying prior-year losses. Unused capital losses are reported in your tax return each year.

Cost base and what you can include

Your cost base is the amount you originally paid plus certain costs associated with acquiring, holding, and disposing of the asset. This includes brokerage fees, legal costs, and stamp duty on acquisition; capital improvements (for property); and real estate agent commissions on sale. Including all eligible costs reduces your capital gain and therefore your tax. For shares, the cost base per share is the average price paid including brokerage. Keep good records, as the ATO can ask for evidence years later.

Who qualifies for the 50% CGT discount?

The 50% CGT discount is only available in specific circumstances. Getting this wrong can lead to an underpayment of tax or an unexpected bill.

Discount applies

Australian resident individuals
Assets held for more than 12 months
Assets acquired on or after 20 September 1985
Shares, ETFs, investment property, cryptocurrency
Vacant land and collectables held 12+ months

Discount does not apply

Companies (no discount, taxed at 30% flat)
Non-residents and temporary residents
Assets held for 12 months or less
Superannuation funds (one-third discount applies instead)
Your main home (exempt, not discounted)
Pre-CGT assets acquired before 20 September 1985

What counts as your cost base?

Your cost base is not just the purchase price. Every dollar you can legitimately include reduces your capital gain and your tax. Miss eligible costs and you overpay.

Generally included

Purchase price or consideration paid
Brokerage or exchange fees on purchase (shares, ETFs, crypto)
Legal and conveyancing fees
Stamp duty (for property)
Capital improvements, e.g. renovations, extensions, structural work (property)
Agent commissions and legal fees on sale

Generally excluded

Interest on investment loans
Ongoing maintenance, repairs, and gardening
Depreciation or deductions already claimed against income
GST (if you have already claimed it as an input tax credit)

Cost base rules vary by asset type and individual circumstances. The ATO publishes detailed guidance for shares, property, and crypto. Keep records for as long as you hold the asset plus five years after disposal.

Worked examples

Long-term ASX ETF gain — 50% CGT discount applies: Brooke bought $14,000 of VGS in April 2023 and sold for $22,000 in June 2025 (held 26 months). Capital gain: $8,000. Because the asset was held longer than 12 months, the 50% CGT discount applies, taxable gain reduces to $4,000. At a 32% combined marginal rate (30% income tax + 2% Medicare levy, income $85,000), CGT payable is $1,280, an effective rate of 16% on the actual $8,000 gain. Assumption: no other capital gains or losses in the income year.
Crypto sold under 12 months — no CGT discount: John bought $6,500 of Ethereum in January 2025 and sold for $14,000 in August 2025 (held 7 months). Capital gain: $7,500. No CGT discount applies as the asset was held for less than 12 months, the full $7,500 is assessable income. At a 32% marginal rate, CGT is $2,400. Had John waited another 5 months past the 12-month mark, the taxable gain would halve to $3,750 and CGT would reduce to $1,200, a $1,200 saving for patience.
Using a capital loss to reduce CGT: Priya sold BHP shares held for 3 years at a $15,000 gain. In the same income year she sold a speculative junior miner at a $4,500 loss. The loss is applied first — net gain becomes $10,500. Applying the 50% CGT discount, the taxable gain is $5,250. At a 32% marginal rate, CGT is $1,680. Without the capital loss her tax would have been $2,400, the $4,500 loss cut the CGT bill by $720. Capital losses can be carried forward indefinitely to offset future gains.
Investment property sold after 17 years — large gain spanning multiple brackets: Margaret purchased an investment property in April 2008 for $350,000 and sold in June 2025 for $680,000 (held 17 years). Capital gain: $330,000. The 50% CGT discount applies (held over 12 months), reducing the taxable gain to $165,000. Added to Margaret's $25,000 other income, total assessable income is $190,000. The gain spans three tax brackets; total additional tax attributable to the gain is approximately $54,600, an effective rate of 16.5% on the actual $330,000 profit. Without the 50% CGT discount the full $330,000 would be assessable, pushing total income to $355,000 and generating approximately $131,400 in additional tax (effective rate 39.8%). The discount saves roughly $77,000. Assumptions: FY2026–27 rates; no cost base adjustments for renovations or selling costs; no capital losses in the year; enter your actual income and gain for a precise estimate.

Frequently asked questions

What is the 12-month CGT discount and how does it work?: Australian resident individuals who hold an asset for at least 12 months before selling can reduce their capital gain by 50% before it is taxed. For example, a $50,000 gain becomes a $25,000 assessable gain after the discount. At the 30% marginal rate, CGT falls from $15,000 to $7,500, a saving of $7,500 simply by holding longer. The 12-month clock starts on the day after acquisition and ends on the day of sale. Companies do not qualify; self-managed super funds receive a one-third discount instead.
Do I pay CGT when I sell my home?: Generally no. Your principal place of residence (main home) is exempt from CGT if it has been your primary residence for the entire ownership period and you have not used it to produce income. Partial exemption applies if you rented part of it, or if it was not your main residence for part of the period. The exemption also covers up to two hectares of adjacent land. If you sell an investment property, normal CGT rules apply and the 50% discount may reduce your liability.
How does CGT work for shares and ETFs?: When you sell shares or ETF units, any profit is a capital gain. You calculate the gain as the sale proceeds minus the cost base, the original purchase price plus brokerage. If you hold for 12+ months, the 50% discount applies. Dividend reinvestment plan (DRP) shares each have their own cost base and 12-month holding period from the date they were issued. Share traders (who buy and sell frequently as a business) are taxed on trading profits as ordinary income, not CGT.
Is cryptocurrency subject to CGT in Australia?: Yes. The Australian Tax Office (ATO) treats cryptocurrency as property, not currency. Disposing of crypto, selling it, converting it to another coin, or using it to buy goods, is a CGT event. The 50% discount applies if you held the crypto for 12+ months before disposal. Crypto-to-crypto trades are taxable events at the time of the trade, valued in AUD. If you genuinely use crypto for personal transactions under $10,000, personal use asset rules may apply, but investment holdings do not qualify.
What if I have both capital gains and capital losses in the same year?: Capital losses must first be applied against capital gains in the same year before you can apply the CGT discount. This sequencing matters: if you have a $20,000 gain from a 12-month asset and a $5,000 loss, you first reduce the gain to $15,000, then apply the 50% discount to get a $7,500 assessable gain. If you net losses after offsetting gains, the remaining loss carries forward to future years and does not expire.
Does CGT apply to assets I inherited?: Inherited assets have special CGT rules. If the deceased person acquired the asset on or after the CGT start date (20 September 1985), you generally inherit the asset at the deceased's cost base and the 12-month clock restarts from the date of death. If the deceased held the asset for 12+ months, you are immediately eligible for the 50% discount when you sell. Assets acquired before the CGT start date (pre-CGT assets) pass to beneficiaries free of CGT at their market value at the date of death.
When do I report and pay CGT in Australia?: CGT is not paid at the time of sale, it is reported when you lodge your annual income tax return for the financial year in which the sale occurred. The capital gain is added to your assessable income and taxed at your marginal rate after any applicable CGT discount. Your tax return is generally due 31 October; using a registered tax agent typically extends this deadline. If CGT significantly increases your tax liability, you may be placed on a PAYG instalment arrangement that requires pre-paying a portion of estimated future tax each quarter.

Common CGT mistakes

These are the most frequent errors Australian investors make when calculating or reporting capital gains.

Forgetting brokerage and transaction fees

Your cost base includes brokerage paid on purchase and sale. Omitting these inflates your calculated gain. On a $100 brokerage payment at a 30% marginal rate, that's $30 in unnecessary tax per transaction.

Misunderstanding the 12-month rule

The 12-month clock starts the day after you acquire the asset and ends on the date of the contract of sale, not the settlement date. Settling in a new financial year does not change when the gain is assessable, it's the contract date that controls.

Applying the CGT discount before capital losses

The correct ATO sequencing is: apply capital losses first, then take the 50% discount on the remaining gain. Applying the discount first and then deducting losses gives the wrong result, and a lower tax bill than you actually owe.

Assuming every asset or structure qualifies for the discount

Companies receive no CGT discount. Non-residents are not eligible. Assets held through certain trusts or structures may have different rules. The 50% discount applies specifically to Australian resident individuals and some eligible trusts.

Ignoring capital improvement costs for property

Renovations, extensions, or structural improvements to investment property add to your cost base and reduce your gain. Keep all invoices. The ATO can request evidence many years after the sale, and undocumented improvements cannot be claimed.

Treating crypto-to-crypto swaps as non-events

Each crypto-to-crypto trade is a CGT event in Australia. Converting Bitcoin to Ethereum triggers a disposal of Bitcoin at its AUD value at the time of the trade. Track every swap, not just conversions back to fiat currency.

CGT record keeping checklist

The ATO requires you to keep CGT records for five years after you dispose of an asset. Missing documentation can mean you cannot support your cost base claims if audited.

Acquisition records

Purchase contract or trade confirmation (shares, ETFs, crypto)
Settlement statement showing purchase price and all costs
Brokerage or exchange fee receipts
Stamp duty payment records (property)

During ownership

Capital improvement invoices and receipts (property)
Records of any partial disposals or parcel sales
Dividend reinvestment plan (DRP) statements, each parcel has its own cost base and holding period

Disposal records

Sale contract or trade confirmation
Agent commission invoices (property)
Legal fee invoices for the sale
Settlement statement confirming sale proceeds

Tax history

Prior year tax returns showing any carried-forward capital losses
ATO correspondence or income tax assessments

How this calculator works

Enter the purchase price, sale price, and holding period. The calculator determines your capital gain (sale price minus cost base) and checks whether you qualify for the 50% CGT discount, available to Australian resident individuals who hold an asset for more than 12 months. If you do, the gain is halved before being added to your assessable income. Capital losses are applied before the 50% discount is taken (correct ATO sequencing).

CGT is not a separate tax. It is part of your income tax, applied at your marginal rate. This is why the result changes depending on your total income: a $30,000 capital gain costs a high earner in the 45% bracket roughly twice as much in tax as the same gain costs someone in the 19% bracket. Enter your other taxable income to see an accurate estimate.

The result is an estimate based on the current year's tax rates. It assumes a straightforward disposal and does not cover the main residence exemption, small business CGT concessions, or complex cost base adjustments. Use the result to plan the timing of a sale (for example, crossing the 12-month threshold, or spreading a gain across two income years), then confirm with a registered tax agent before settling.

Methodology

Assumptions: Australian resident individual taxpayer; asset fully disposed of in a single transaction; no pre-CGT assets.
Calculation: Capital gain = proceeds − cost base; capital losses applied before the discount; if held > 12 months, gain is halved (50% CGT discount) before being added to assessable income.
Limitations: Does not cover collectables, the main residence exemption, business CGT concessions, or partial disposals.

Sources

Australian Taxation Office — Capital gains tax

Last updated: July 2026

Related guides

Capital Gains Tax in Australia ExplainedHow the 50% CGT discount works and why the holding period matters.