The rule as it stands
An individual investor who disposes of a CGT asset held for more than twelve months discounts the capital gain by 50% before it joins their assessable income. The clock runs per parcel from acquisition; the gain is measured against that parcel's cost base — price plus incidental costs, in AUD; capital losses are applied before the discount, which is why offsetting losses against discounted gains is less generous than it looks. There is no separate CGT rate: the discounted gain stacks on top of your other income and is taxed at your marginal rate.
What was legislated on 26 June 2026
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 replaces the discount for CGT events from 1 July 2027 with two mechanisms: cost-base indexation — for assets held more than twelve months the cost base rises with CPI, so only the real, above-inflation gain is taxed — and a 30% minimum tax on net capital gains, so the real gain cannot be taxed below 30% even where the holder's marginal rate is lower. Transitional detail is still being settled through ATO guidance, and this page will track it through the change log.
The transition is the whole question
The reform applies to gains arising after 1 July 2027 — gains that accrued before that date keep the old treatment. For a holder sitting on years of appreciation, that boundary works like the residency date in our Puerto Rico crossing page: the gain splits at a date, and the record proving which part accrued when becomes the most valuable document you own. What that means in practice — valuations, deemed-cost mechanics, elections — is exactly the transitional detail now being filled in. We will not guess at it; we will publish it when the guidance is real.
Between now and 30 June 2027, every long-held parcel carries a question it never carried before: is this a disposal for the old regime, or a holding for the new one? That is a per-parcel decision with a deadline.
Honest planning, in order
- Inventory parcels and their clocks first. Acquisition dates, cost bases, current values. Which parcels clear twelve months before 30 June 2027, and which never will? Nothing intelligent can be decided without this table.
- Do not let the tax tail wag the dog. Selling an asset you wanted to keep purely to bank the discount is a market position dressed as a tax plan. Run the arithmetic both ways: 50% off at your marginal rate now, versus indexed cost with a 30% floor later. For many incomes the difference is smaller than the headlines imply.
- Mind the twelve months to the day. A disposal at eleven months and three weeks forfeits the discount entirely, in its final year of existence. The per-parcel clock is unforgiving, and swaps count as disposals.
- Remember losses come first. Losses reduce gains before discounting. Sequencing which parcels realise losses and which realise discounted gains within the same year changes the bill — legitimately, if the transactions are real. For the boundary where "real" ends, read the wash-sale page before June, not after.
- Anything at scale: advice, now. The final year of a thirty-year rule plus an unfinished transition is precisely when a registered tax agent earns their fee. The queue in May 2027 will be long.
Traders never had the discount
One clarification that saves people from the wrong plan entirely: the discount belongs to investors on capital account. If your activity is business-like trading — volume, system, profit-seeking — you are on revenue account: no discount now, no indexation later, ordinary income throughout. Whether you are one or the other is a facts test, and it is line 02 of the schedule for a reason.
This page explains a rule mid-transition. Transitional mechanics are pending ATO guidance and are marked as such. It is not advice on any disposal, and reading it creates no professional relationship.