What the ATO says
You can reduce a capital gain by 50% if you owned the asset for at least 12 months and you are an Australian resident for tax purposes. When working out the 12 months, you exclude the day of acquisition and the day of the CGT event. The CGT event is the contract date if there is a contract (usually property), or the time of sale if there is none.
Counting the days
Excluding both the purchase day and the sale day means the sale must be after the first anniversary of the purchase:
| Bought | Sold | Discount? |
|---|---|---|
| 3 January 2024 | 2 January 2025 | No |
| 3 January 2024 | 3 January 2025 (the anniversary) | No |
| 3 January 2024 | 4 January 2025 | Yes |
| 29 February 2024 | 28 February 2025 | No |
| 29 February 2024 | 1 March 2025 | Yes |
The calculator applies the same test and shows the anniversary date, so you can see how close a sale was. If you are planning a sale near the mark, wait at least a couple of days past the anniversary to be safe.
Trade dates, not settlement
For listed shares, the trade date is when the CGT event happens; settlement two business days later does not matter. For property, it is the date the contract is signed. A contract signed eleven months after you bought, settling three months later, does not qualify.
What the discount is worth
On a $20,000 gain, the discount removes $10,000 from your taxable income. At the 30% marginal rate plus 2% Medicare levy, that is $3,200 of tax. At 45%, it is $4,700. Selling a few days too early can cost real money.
Parcels and the 12-month rule
If you bought the same shares or crypto at different times, each parcel has its own date. A partial sale might include some parcels over 12 months and some under. Your choice of matching method matters: first in, first out usually picks older parcels; specific identification lets you choose parcels that qualify. See FIFO vs specific identification.
Who cannot use the discount
- Companies (complying super funds get one-third instead of one-half).
- Foreign and temporary residents, for gains after 8 May 2012 (apportioned for periods of Australian residency).
- Your home first used to produce income in the last 12 months before you sold it.
- Assets you chose to index instead (bought before 21 September 1999).
- CGT events that create a new asset, such as granting a lease or a restrictive covenant.
Losses come off first
The discount applies after capital losses are subtracted, not before. If you have $10,000 of gains and $4,000 of losses, the discount halves $6,000, not $10,000.
Proposed changes
The 2026–27 Federal Budget (12 May 2026) announced that, for gains arising from 1 July 2027, the 50% discount would be replaced by cost-base indexation and a minimum 30% tax on net capital gains, with assets held on 30 June 2027 treated as reacquired at market value. It is a proposal and must pass Parliament; the ATO says it does not apply to Tax Time 2026. This calculator applies the current rules only.
Gifted, inherited and swapped assets
The 12 months usually start when you acquired the asset, but there are special cases. If you inherit an asset the deceased acquired on or after 20 September 1985, their period of ownership counts towards the 12 months. If you receive shares in a takeover with scrip-for-scrip rollover, the original shares' acquisition date generally carries across. A gift, on the other hand, starts a new holding period for the person receiving it, with a cost base equal to the market value at the time.
Planning a sale near the anniversary
If you are a few weeks short of 12 months and the price is holding, waiting can halve the tax on the gain. But the discount is only worth something if the gain survives: a 10% fall in price while you wait can cost more than the discount saves. Treat the rule as one input to the decision, not the decision itself. The calculator's quick mode shows the anniversary date and lets you try both sale dates side by side.