The 50% CGT Discount Explained

Capital gains tax (CGT) is tax on the profit you make when you sell something for more than it cost you.

The rules hide one genuinely generous deal: hold an asset for more than 12 months before selling and, as an individual (a regular person, not a company), you generally only pay tax on half the gain. That's the 50% CGT discount — worth thousands for doing nothing but waiting.

Own the asset for more than 12 months: discount applies. Sell at 12 months or less: full gain, full tax. The clock generally runs from the day you bought to the day you sold.

That makes timing worth real money — selling a winner at month 11 versus month 13 can double the profit you're taxed on.

Capital gains tax isn't a separate tax with its own rate. Your net capital gain (what's left after the discount) is added to your other income and taxed at your marginal rate — the rate that applies to the top slice of your income.

For FY2025-26 those rates are 0% up to $18,200, then 16%, 30%, 37% and 45% as income climbs — plus the 2% Medicare levy (the health-system tax most workers pay). A big enough gain can push part of your income into a higher tax bracket.

Say you bought shares for $10,000 and sold them 18 months later for $30,000. The gain is $20,000 — but because you held past the 12-month line, only $10,000 of it is taxable.

At a 30% marginal rate plus the 2% Medicare levy, that's roughly 32%: about $3,200 in tax. Sold inside 12 months, the bill would've been around $6,400. Waiting past month twelve saved about $3,200.

The ATO treats crypto as a CGT asset, exactly like shares or an investment property. Selling, swapping one coin for another, even spending crypto — each counts as a 'disposal' in tax speak and can trigger a capital gain or loss.

Hold a coin for more than 12 months and the same 50% discount applies. Swap coins every few weeks and you'll rarely qualify — and every sale, swap or spend still needs to be tracked and reported.

Capital losses — selling something for less than you paid — cancel out your gains, and they're subtracted before the discount is applied, the order that saves you the most tax. Unused losses roll forward to future years, forever, until you use them.

The discount belongs to individuals and trusts (a legal structure for holding assets), not companies — and super funds play by their own rules. Keep records of purchase dates and costs, because the 12-month line is drawn to the day.