The 50% CGT discount is the single biggest lever on the tax you pay when you sell shares. For Australian resident individuals, if you held the shares for more than 12 months you generally pay tax on only half the capital gain (ATO: CGT discount).
The more-than-12-months rule
To qualify, you need to have owned the shares for at least 12 months before the CGT event (the sale). The ATO counts this by excluding both the day you acquired the shares and the day of the sale. In practice, that means holding past the first anniversary of your purchase. Sell on or before that anniversary and the whole gain is taxable, with no discount.
A worked example
You buy shares for $10,000 plus $20 brokerage, and sell them 18 months later for $16,000 with another $20 brokerage.
- Cost base: $10,000 + $20 + $20 = $10,040
- Capital proceeds: $16,000
- Capital gain: $16,000 − $10,040 = $5,960
- Held more than 12 months, so the 50% discount applies: you are taxed on $2,980
That $2,980 is added to your income for the year and taxed at your marginal rate. Sell the same shares at 11 months instead, and the full $5,960 would be taxable.
Losses come first, then the discount
If you also made capital losses, you must apply them before the 50% discount, not after. A loss reduces the gain dollar for dollar, and only the amount left over gets halved. Applying the loss to gains that do not qualify for the discount first leaves you with the lowest tax. There is more in our guide to capital losses.
Who does not get it
The 50% discount is for individuals and trusts. Companies do not get it. Self-managed super funds get a one-third (33.33%) discount rather than 50%. If you trade through a company structure, the discount does not apply.
A note on 2027
The government has announced proposed changes to the CGT discount intended to start from 1 July 2027. They are not yet law. The current 50% discount continues to apply for now, including for the 2026 tax year.
CGT Mate applies the discount automatically, per parcel, based on exactly how long each parcel was held, so you can see which of your sales qualify and which do not.