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Stamp Duty NSW & VIC 2026-27: First Home Buyer Exemptions Explained

Stamp duty is the tax everyone forgets to budget for and nobody forgets after paying. On an $800,000 Sydney home, the standard bill is $30,187 — due at settlement, on top of your deposit, in cash. For first home buyers, though, both NSW and Victoria will wipe that bill entirely if your purchase sits under the right threshold.

The catch — and it’s a big one — is that these thresholds are cliffs. In Victoria, bidding $1,000 over $750,000 doesn’t cost you $1,000. It can cost you $15,000 or more in lost concessions. This guide maps exactly where the cliffs are in NSW and Victoria for 2026-27, with worked examples at every price point that matters.

Quick answer: In NSW for 2026-27, eligible first home buyers pay $0 stamp duty on homes up to $800,000, a concessional rate from $800,001 to $999,999, and full duty from $1,000,000. In Victoria, it’s $0 up to $600,000, concessional to $750,000, and full duty above that. Both states require you to move in within 12 months and live there for 12 continuous months.

NSW: the $800,000 line that matters most

NSW has the most generous first home buyer thresholds on the Australian mainland, run through the First Home Buyers Assistance Scheme (FHBAS) by Revenue NSW. Since July 2023, the same thresholds apply whether you’re buying new or established — it used to favour new builds, but that distinction is gone.

What you’re buying	$0 duty up to	Concessional rate	Full duty from
New or existing home	$800,000	$800,001 – $999,999	$1,000,000
Vacant land (to build on)	$350,000	$350,001 – $449,999	$450,000

What you’d actually pay at key prices (2026-27 rates):

Purchase price	Standard duty	Eligible first home buyer
$600,000	$21,187	$0
$800,000	$30,187	$0
$900,000	$34,687	$19,594
$1,000,000	$39,187	$39,187 (no relief)

Read that $900,000 row carefully: the concession saves you $15,093. But nudge the price to $1,000,000 and the saving vanishes completely. Every extra $1,000 you pay above $800,000 adds roughly $196 in duty. When you’re negotiating, knowing exactly where you sit on that slope is worth real money.

NSW eligibility: the fine print that disqualifies people

Never owned residential property in Australia — not just NSW. A unit you owned in Brisbane fifteen years ago disqualifies you. Your partner’s ownership history counts too.
Move in within 12 months of settlement and live there for 12 continuous months. Break this and Revenue NSW can claw back the duty plus penalties.
Australian citizen or permanent resident (standard requirement).
The property must be your principal place of residence — not an investment.

The residence requirement is where the money gets lost at the edges. A job transfer six months in, a relationship change, a delayed renovation — any of them can breach the 12-month continuous residence test. If your circumstances might change, talk to your conveyancer before you claim.

NSW standard rates 2026-27 (for reference)

If you don’t qualify for the scheme, these are the rates Revenue NSW applies (effective 1 July 2026):

Property value	Duty payable
Up to $17,000	$1.25 per $100 (minimum $20)
$17,001 – $37,000	$212 + $1.50 per $100 over $17,000
$37,001 – $99,000	$512 + $1.75 per $100 over $37,000
$99,001 – $372,000	$1,597 + $3.50 per $100 over $99,000
$372,001 – $1,240,000	$11,152 + $4.50 per $100 over $372,000
Over $1,240,000	$50,212 + $5.50 per $100 over $1,240,000
Over $3,721,000 (premium property)	$186,667 + $7.00 per $100 over $3,721,000

You don’t need to memorise this — our stamp duty calculator applies the right bracket automatically. But it’s worth seeing how steeply the marginal rate climbs: that last bracket charges 7 cents on every dollar over $3.72 million.

Victoria: the $600,000 cliff is brutal

Victoria’s scheme is less generous and, frankly, more dangerous. The full exemption stops at $600,000 — and in a Melbourne market where the affordable-house medians cluster right around that number, the cliff edge sits exactly where the bidding gets competitive.

Purchase price	Standard duty	Eligible first home buyer
$500,000	$21,970	$0
$600,000	$31,070	$0
$700,000	$37,070	$24,713
$800,000	$43,070	$43,070 (no relief)

The scenario that should keep you up at night: you’re at auction, bidding hits $745,000, and the auctioneer calls for $755,000. Your instinct screams “yes” — it’s only $10,000 more on the house. But you’ve just crossed $750,000, the concession vanishes entirely, and your stamp duty jumps from a discounted figure to the full ~$40,000+. That $10,000 bid really cost you $25,000.

Victoria’s eligibility mirrors NSW: first home, never owned residential property in Australia (partner included), move in within 12 months, live there 12 continuous months. It applies to houses, townhouses, apartments, units and vacant land. Claims go through the State Revenue Office’s digital duties form — your conveyancer normally handles it at settlement.

NSW vs Victoria: side by side

	NSW	Victoria
Full exemption to	$800,000	$600,000
Concession to	$999,999	$750,000
New vs established	Same thresholds	Same thresholds
Vacant land relief	Yes ($350k/$450k)	Included in scheme
Foreign buyer surcharge	9%	8%
Residence requirement	12 months in, 12 months continuous	12 months in, 12 months continuous

NSW is clearly the better deal for first home buyers — $200,000 more headroom on the full exemption. But Victoria’s medians are lower, so the practical difference narrows in the outer suburbs where first buyers actually shop.

Five ways buyers pay more duty than they should

1. Crossing a threshold mid-negotiation. The $800,000/$1,000,000 (NSW) and $600,000/$750,000 (VIC) lines are the most expensive numbers in your purchase. Know them before you make an offer, not after.

2. Not checking a partner’s history. Your partner owned a flat before you met? You’re both disqualified. This is the single most common reason claims get rejected.

3. Buying land + build as one contract (NSW). If you’re building, separate land and construction contracts where possible — you generally pay duty on the land value, not the finished house. On a $750,000 house-and-land package where the land is $400,000, that’s the difference between duty on $750,000 and duty on $400,000.

4. Forgetting the duty is due at settlement. It’s not part of your loan (unless you’ve specifically financed it). Budget 4–6% of the purchase price for total upfront costs: duty, legals ($1,500–$3,000), building and pest ($500–$1,000), and LMI if your deposit is under 20%.

5. Assuming off-the-plan is the same. Off-the-plan can reduce duty because it’s often calculated on the land value plus construction completed at the contract date — but the rules are specific. Get your conveyancer to model it before you sign.

Frequently asked questions

Does the NSW exemption apply to established homes or only new builds?
Both. Since July 2023, new and established homes share the same thresholds ($800,000 exemption, concession to $1 million). The First Home Owner Grant is separate and only applies to new homes.

What happens if I can’t move in within 12 months?
You risk losing the exemption and having to repay the duty plus penalties. Talk to Revenue NSW (or the SRO in Victoria) and your conveyancer immediately if your plans change — don’t just hope nobody notices.

Can I claim the exemption if my partner owned property before?
No. If any purchaser (or their spouse/partner) has previously owned residential property in Australia, the whole purchase is generally ineligible.

Is stamp duty calculated on the contract date or settlement date?
The dutiable value is generally set at the contract (exchange) date. Duty itself is usually paid at settlement, around 30–90 days later.

Do first home buyer schemes apply to vacant land?
In NSW, yes — $0 duty to $350,000 and concessional to $450,000 for land you intend to build your home on. In Victoria, vacant land is included in the scheme thresholds.

What about the NSW annual property tax option?
NSW previously offered eligible first home buyers a choice between upfront stamp duty and an annual property tax. Check the current status with Revenue NSW or your conveyancer, as scheme settings have changed over time — model both options if both are available to you.

The bottom line

For 2026-27: NSW first home buyers pay nothing to $800,000 and get relief to $1 million; Victorians pay nothing to $600,000 with relief to $750,000. The thresholds are cliffs — know exactly where your offer sits before you make it, check every purchaser’s ownership history, and protect your 12-month residence requirement like the $30,000 depends on it. Because it does.

Get your exact figure in seconds with our free stamp duty calculator — and if you’re selling an investment property down the track, our CGT calculator will show you the other side of the ledger.

October 5, 2026

Income Tax Rates Australia 2026-27: Brackets, Cuts & Worked Examples

Every July, Australia’s tax brackets shift a little — and this year the shift puts real money back in your pocket. From 1 July 2026, the tax rate on income between $18,201 and $45,000 dropped from 16% to 15%. It sounds small. It isn’t: everyone earning above $45,000 keeps an extra $268 a year, automatically, through their regular pay.

This guide lays out the complete 2026-27 resident tax rates, shows exactly what you’d pay at $60,000, $90,000 and $200,000, and covers the pieces people forget — the Medicare levy, the surcharge, and what non-residents pay.

Quick answer: For 2026-27, Australian residents pay 0% to $18,200, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above that. These are marginal rates — each rate applies only to income within its bracket. Add the 2% Medicare levy on top. The 15% rate (down from 16%) is legislated to fall further to 14% from 1 July 2027.

The 2026-27 tax brackets

Taxable income	Tax rate	Tax on this bracket
$0 – $18,200	0% (tax-free threshold)	Nil
$18,201 – $45,000	15%	15c per $1 over $18,200
$45,001 – $135,000	30%	$4,020 + 30c per $1 over $45,000
$135,001 – $190,000	37%	$31,020 + 37c per $1 over $135,000
$190,001 and over	45%	$51,370 + 45c per $1 over $190,000

Source: ATO individual income tax rates. These rates exclude the Medicare levy.

The change from last year is exactly one cell in that table: the second bracket went from 16% to 15% under the Treasury Laws Amendment (More Cost of Living Relief) Act 2025. Because every bracket above it builds on the tax from the brackets below, the $268 saving flows through to every taxpayer earning above $45,000 — not just people earning under $45,000.

And there’s more coming: the same legislation drops that bracket to 14% from 1 July 2027, which will save earners above $45,000 a total of $536 a year compared to 2025-26.

What “marginal” actually means

The single most misunderstood word in Australian tax. Marginal means each rate applies only to the dollars inside that bracket — not to your whole income. Earn $50,000 and you do not pay 30% on $50,000. You pay:

$0 on the first $18,200
15% on the next $26,800 ($18,201–$45,000)
30% on the final $5,000 ($45,001–$50,000)

Your marginal rate is 30% (the rate on your last dollar). Your average rate — total tax divided by total income — is much lower. Confusing the two is how people end up turning down pay rises they think will “push them into a higher bracket.” It doesn’t work like that. You can never lose money by earning more under a marginal system.

Worked examples: what you’d actually pay

These include the 2% Medicare levy, because that’s what actually leaves your pay.

Example 1: $60,000 salary
Income tax: $4,020 + ($60,000 − $45,000) × 30% = $4,020 + $4,500 = $8,520
Medicare levy: $60,000 × 2% = $1,200
Total: $9,720 (average rate 16.2%)

Example 2: $90,000 salary
Income tax: $4,020 + ($90,000 − $45,000) × 30% = $4,020 + $13,500 = $17,520
Medicare levy: $90,000 × 2% = $1,800
Total: $19,320 (average rate 21.5%)

Example 3: $200,000 salary
Income tax: $51,370 + ($200,000 − $190,000) × 45% = $51,370 + $4,500 = $55,870
Medicare levy: $200,000 × 2% = $4,000
Total: $59,870 (average rate 29.9%)

Run your own salary through our free income tax calculator — it handles the brackets, Medicare levy and surcharge for 2026-27 in one go.

The Medicare levy (and the surcharge nobody budgets for)

The 2% Medicare levy applies to your entire taxable income (not just part of it), on top of the rates above. Low-income earners get a reduction or exemption — the thresholds are indexed each year, so check the current year’s figures if you’re near the line.

The Medicare Levy Surcharge (MLS) is the one that bites. If you earn above the MLS thresholds and don’t hold eligible private hospital cover, you pay an extra 1% to 1.5% on top of everything. For 2026-27, the singles tiers start at $105,000 (1%), then $123,000 (1.25%) and $164,000 (1.5%).

Do the maths before you skip private health insurance: at $110,000 income, the 1% surcharge costs you $1,100 a year. A basic hospital policy often costs less than the surcharge — which is exactly the point of the policy. It’s not really a health decision; it’s arithmetic.

What non-residents pay

Different rules, and they catch people out. Non-residents get no tax-free threshold and pay from the first dollar:

Taxable income (Australian-sourced)	Tax rate 2026-27
$0 – $135,000	30%
$135,001 – $190,000	37%
$190,001 and over	45%

Non-residents generally don’t pay the Medicare levy either. If you’re on a temporary visa or split the year between countries, your residency status for tax purposes is the first thing to pin down — it changes everything. Working holiday makers (subclasses 417 and 462) have their own separate rate: 15% on the first $45,000.

How the 2026-27 cuts compare

A quick look at where we’ve come from:

Year	Second bracket rate	What changed
2023-24	19%	Pre-reform
2024-25	16%	Revised Stage 3: 19%→16%, 32.5%→30%, thresholds lifted
2025-26	16%	Held steady
2026-27	15%	Cost-of-living relief cut
2027-28	14% (legislated)	Final step of the current package

The direction is clear: the government is steadily flattening the tax paid by low and middle earners. Someone on $60,000 now pays roughly $2,000 less than they would have under the old 2023-24 rates — a meaningful pay rise by another name.

Reducing your taxable income legally

Your taxable income — not your salary — is what the brackets apply to. Common ways Australians legitimately shrink it:

Salary sacrifice into super — contributions come out pre-tax, taxed at 15% in the fund instead of your marginal rate. See our salary sacrifice guide for the numbers.
Work-related deductions — for 2026-27 there’s a $1,000 instant deduction for work-related expenses available without receipts.
Negative gearing — rental losses offset your salary income (controversial, but legal).
Income splitting — where legitimately available (e.g. spouse contributions to super).

Each of these interacts with the brackets differently. A $5,000 deduction saves someone on the 30% rate $1,500, but saves someone on the 45% rate $2,250. Deductions are worth more the higher your marginal rate — which is why timing them into high-income years (say, the year you sell an investment property and realise a capital gain) can be smart planning.

Don’t forget the admin

Two dates matter as much as the rates. Your employer handles PAYG withholding through the year using the ATO’s updated schedules, so the 15% cut should already be showing up in your payslips — if your payroll hasn’t updated since July, that’s a conversation with your payroll team, not the ATO.

And when you lodge your 2026-27 return, the deadline is 31 October 2027 (or later if you’re with a registered tax agent). Keep your payment summaries, deduction receipts and any investment records together through the year; reconstructing them in October is how deductions get missed.

Frequently asked questions

When do the 2026-27 tax rates apply?
To all taxable income earned from 1 July 2026 to 30 June 2027. Your employer adjusts PAYG withholding automatically — you don’t need to do anything.

Do I need to do anything to get the tax cut?
No. It flows through your pay automatically via updated PAYG withholding schedules. You’ll also see it when you lodge your 2026-27 return.

What’s the difference between marginal and average tax rate?
Your marginal rate is the tax on your next dollar (the bracket you’re in). Your average rate is total tax divided by total income — always lower. A $90,000 earner has a 30% marginal rate but a ~21.5% average rate including Medicare.

Does the Medicare levy apply to all my income?
Yes — 2% on your entire taxable income, with reductions for low-income earners. It’s separate from the bracket rates.

I’m a non-resident — do I get the $18,200 tax-free threshold?
No. Non-residents pay 30% from the first dollar of Australian-sourced income up to $135,000.

Will rates change again next year?
The 15% second-bracket rate is legislated to drop to 14% from 1 July 2027. Beyond that, future changes depend on government policy and legislation.

The bottom line

For 2026-27, the headline is simple: same brackets as last year, but the second rate is now 15% instead of 16%, saving every taxpayer above $45,000 exactly $268. Add the 2% Medicare levy to whatever the table gives you, watch out for the surcharge if you’re over $105,000 without hospital cover, and remember that deductions are worth more the higher your marginal rate.

Want your exact number? Our free income tax calculator does the full 2026-27 calculation — brackets, Medicare levy and all — in under a minute.

October 5, 2026

Capital Gains Tax on Property in Australia: The Complete 2026-27 Guide

If you’re selling a property this financial year, capital gains tax is probably the biggest single cost you’ll face — bigger than agent commissions, bigger than stamp duty was when you bought. And yet most sellers only think about it after they’ve signed the contract, when most of the planning opportunities have already evaporated.

Here’s the thing most people get wrong from the start: CGT isn’t a separate tax with its own rate. There’s no “CGT rate” in Australia. Your capital gain gets added to your taxable income for the year and taxed at your marginal rate, just like your salary. That one misunderstanding is behind half the nasty surprises at tax time.

This guide walks through exactly how capital gains tax on property works in Australia for 2026-27 — the calculation, the 50% discount, the main residence exemption, the 6-year rule — with real numbers at every step.

Quick answer: You pay CGT on an Australian property when you sell (or otherwise dispose of) it for more than your cost base. Your cost base is the purchase price plus buying costs, selling costs and capital improvements. If you owned it for more than 12 months as an individual, you generally halve the gain with the 50% CGT discount, then add the remainder to your taxable income. Your own home is usually fully exempt. The tax is triggered on the contract date, not settlement.

How CGT on property actually works

A “CGT event” — the thing that triggers the tax — usually happens on the day you sign the contract of sale, not the day settlement occurs. This trips people up every June. Sign a contract on 28 June 2027 and the gain belongs to 2026-27, even if settlement happens in September. If you were planning to push the gain into next year, that plan just failed.

The basic formula is straightforward:

Capital gain = Sale price − Cost base

Your cost base isn’t just what you paid for the property. It includes:

Cost base element	Examples
Purchase price	Contract price
Buying costs	Stamp duty, legal fees, buyer’s agent fees, building/pest inspections
Ownership costs (if not claimed as deductions)	Interest, rates, insurance — but only if you haven’t already claimed them
Capital improvements	Renovations, extensions, new kitchen — not repairs
Selling costs	Agent commission, legal fees, advertising, staging

[SCREENSHOT NEEDED: CGT calculator — property example, $850,000 sale price with cost base breakdown]

What surprises a lot of sellers: you can’t add repair and maintenance costs to the cost base if you already claimed them as tax deductions while renting the property out. It’s one or the other. But a genuine improvement — a new deck, a renovated bathroom — goes straight onto the cost base and shrinks your gain dollar for dollar. Keep every receipt. The ATO expects you to substantiate each element, and “poor records” is one of the most common reasons property investors overpay.

The 50% discount and the 12-month rule

Here’s the concession that does the heaviest lifting for Australian property investors. If you’re an individual (or investing through a trust) and you’ve owned the asset for more than 12 months, you get to halve your capital gain before it touches your tax return.

The 12 months are measured from contract to contract, and you exclude both the purchase date and the sale date from the count. Sell on day 364 and you get nothing; sell on day 366 and you halve your taxable gain. When a sale is close to the line, check the exact contract dates before you sign anything — a few days’ impatience can cost tens of thousands.

Who gets what:

Owner type	Discount
Individual (Australian resident)	50%
Trust	50%
Complying super fund	33.33%
Company	None — companies pay full CGT at the company tax rate
Foreign/temporary resident	Generally no discount on gains accrued after 8 May 2012

One more wrinkle worth knowing: investors who provide affordable rental housing to eligible tenants may qualify for an additional discount of up to 10%, taking the total discount to 60%. It’s a narrow category with strict eligibility rules, so don’t assume it applies — but if you rent below market to eligible tenants, it’s worth asking your accountant about.

The main residence exemption: when you pay nothing

Your own home is usually completely exempt from CGT. But “usually” is doing a lot of work in that sentence. All three of these conditions have to hold for the whole time you owned it:

It was your main residence for the entire ownership period
You never used it to produce income (no renting it out, no home business claiming part of it)
The land is 2 hectares or less

Miss any one of them and you’re into partial-exemption territory. The classic traps: renting out a spare room on Airbnb for a year, running a business from a home office and claiming occupancy expenses, or buying a house on a big rural block. None of these automatically destroy the exemption, but they shrink it — and the calculation gets fiddly fast.

Properties bought before 20 September 1985 are generally exempt from CGT entirely, regardless of all this. If you’re dealing with a very old family property, check the acquisition date before you do anything else.

The 6-year rule: move out, keep the exemption

This is the rule that saves more sellers than any other, and the one most people have only half-heard. If you move out of your main residence, you can continue treating it as your main residence for CGT purposes for up to six years — even while it’s rented out and earning you income.

The conditions that matter:

It was genuinely your main residence before you moved out
You don’t treat any other property as your main residence during the same period (one main residence at a time)
You sell within the six years — or move back in, which resets the clock

A real scenario. Daniel bought an apartment in Brisbane for $520,000 in 2019 and lived in it for two years. In 2021 work took him to Melbourne, so he rented the Brisbane apartment out. In 2025 — four years later — he sold it for $780,000. Because he never nominated another main residence and sold within six years of moving out, the entire $260,000 gain was exempt. Zero CGT.

Where people come unstuck: buying another home and living in it while the old one is rented. You can’t have two main residences. The moment you nominate the new place, the 6-year clock on the old one stops being available for the overlapping period.

Partial exemptions: when it’s not all-or-nothing

Life is rarely clean enough for a full exemption. Maybe you rented the place out for three years before moving in, or you ran a business from one room. The ATO’s formula for the taxable slice is:

Taxable gain = Total capital gain × (days not your main residence ÷ total days owned)

Days are counted on contract dates, not settlement dates. Then, if you held the property for more than 12 months, the 50% discount applies to the taxable portion.

Worked example. Priya bought a unit for $600,000 in July 2016 and rented it out immediately. In July 2019 she moved in and lived there until selling for $850,000 in July 2026.

Total gain: $850,000 − $600,000 = $250,000 (ignoring costs for simplicity)
Days owned: ~3,650. Days rented out: ~1,095
Taxable portion: $250,000 × (1,095 ÷ 3,650) = $75,000
50% discount (held > 12 months): $75,000 × 50% = $37,500 added to her taxable income

[SCREENSHOT NEEDED: CGT calculator — partial exemption example, $850k sale with 3 of 10 years rented]

Full worked example: investment property sale

Let’s put it all together with realistic numbers. Michael bought an investment property in March 2019 and sells in September 2026 — comfortably over 12 months.

Item	Amount
Sale price	$850,000
Purchase price	$620,000
Buying costs (stamp duty, legals)	$25,000
Capital improvements (new kitchen, 2022)	$25,000
Selling costs (agent, legals)	$19,000
Cost base	$689,000
Gross capital gain	$161,000
50% CGT discount	−$80,500
Net capital gain added to income	$80,500

If Michael’s marginal tax rate is 37% (2026-27 bracket for $135,001–$190,000), the CGT bill is roughly $80,500 × 37% = $29,785, plus the 2% Medicare levy on the gain (~$1,610), for a total of about $31,395.

Notice what mattered most: the $69,000 of costs added to the cost base saved him roughly $12,700 in tax at that rate. Every receipt you kept is money.

Try your own numbers in our free CGT calculator — it handles the discount, cost base and marginal rates for 2026-27 automatically. And if you’re buying rather than selling, our stamp duty calculator will tell you what the purchase will cost you upfront.

Mistakes that cost sellers thousands

Forgetting the contract-date rule. Planning a July sale for next year’s tax return, then signing in June. The ATO taxes the year you sign.

Selling just short of 12 months. The discount is binary. Eleven months and three weeks gets you exactly the same as eleven days: nothing.

Not keeping improvement receipts. That $40,000 renovation with no paperwork is $40,000 of cost base you can’t prove — worth up to $18,000 in extra tax at the top marginal rate.

Assuming the main residence exemption is automatic. Rent it out, run a business from it, or hold more than 2 hectares, and you need to do the partial-exemption maths.

Gifting property to family. The ATO treats most gifts and transfers as happening at market value, even if no money changes hands. You can trigger CGT without receiving a cent.

Frequently asked questions

Do I pay CGT if I sell my own home?
Usually no — if it was your main residence the whole time, wasn’t used to earn income, and sits on 2 hectares or less, the gain is fully exempt. If any of those fail, a partial exemption may apply.

How long do I need to own a property to get the 50% CGT discount?
More than 12 months, measured from the contract purchase date to the contract sale date (excluding both dates). Individuals and trusts qualify; companies don’t.

Is CGT calculated on settlement date or contract date?
Contract date. Sign in June, and the gain counts in that financial year even if you settle in September.

Can I still claim the main residence exemption if I rented my home out?
Yes, for up to six years after moving out under the 6-year rule — provided you don’t claim another main residence in the same period.

Do I pay CGT on an inherited property?
It depends. Inherited dwellings can be fully exempt if sold within two years of the deceased’s death in the right circumstances. Renting it out or waiting longer can trigger CGT — get advice before you decide.

What records do I need to keep?
Everything: purchase contract, stamp duty and legal invoices, loan statements, improvement receipts, rental statements, depreciation schedules, and the sale contract. Keep them for at least five years after the sale.

The bottom line

Capital gains tax on property rewards the organised and punishes the hurried. Know your cost base, watch your dates, and run the numbers before you sign anything — not after. For 2026-27, the 50% discount and the main residence exemption remain the two concessions that matter most, and the difference between using them well and missing them is often tens of thousands of dollars.

Run your sale through our free CGT calculator to see your own liability in under a minute, or browse all our tax tools if you’re juggling a sale alongside income tax or stamp duty planning.

October 5, 2026

The 50% CGT Discount Explained: Australia’s 12-Month Rule in 2026-27

Of all the tax concessions available to everyday Australian investors, the 50% CGT discount is the most valuable — and the most misunderstood. It doesn’t reduce your tax rate. It doesn’t work like a deduction. It literally cuts your capital gain in half before a single dollar of tax is calculated.

On a $200,000 gain, that’s the difference between adding $200,000 to your taxable income and adding $100,000. At the top marginal rate, the discount alone is worth around $45,000. Yet every year, sellers lose it through entirely avoidable mistakes: selling a few days too early, holding through a company, or misunderstanding which date the 12-month clock actually runs from.

This guide covers exactly how the CGT discount works in 2026-27, who qualifies, how the 12 months are counted, and the traps to avoid.

Quick answer: If you’re an Australian resident individual (or a trust) and you’ve held a CGT asset for more than 12 months, you can reduce your capital gain by 50% before adding it to your taxable income. The 12 months run from the contract purchase date to the contract sale date, excluding both dates. Companies get no discount; complying super funds get 33.33%.

What the discount actually does

The mechanics are simpler than most tax law. Take your gross capital gain, subtract any capital losses, then — if you qualify — halve what’s left. That halved amount is your net capital gain, and it goes into your tax return as part of your assessable income for the year.

Gross gain − capital losses = net gain → 50% discount → taxable gain

Note the order matters: you apply capital losses first, then the discount. You can’t discount the gain and then subtract losses from the discounted amount — the ATO requires losses to come off the top. On a $200,000 gain with $40,000 of carried-forward losses, you discount $160,000 (not $200,000), giving a taxable gain of $80,000.

The discount applies per asset, per CGT event. Sell three parcels of shares in the same year and each one is assessed on its own holding period.

Who qualifies — and who doesn’t

This is where the real money is lost, because the answer depends on what kind of taxpayer you are:

Taxpayer type	CGT discount
Individual (Australian resident)	50%
Trust (family/discretionary/unit)	50%
Complying super fund	33.33%
Company	No discount
Foreign or temporary resident	Generally none on gains accrued after 8 May 2012

The company rule catches out more small business owners than anything else in this guide. If your investment property or share portfolio sits inside a company structure, there is no 50% discount — the full gain is taxed at the company tax rate (25% for base rate entities, 30% otherwise). Sometimes the company rate still wins on the maths, but you need to actually do the maths rather than assume.

For foreign and temporary residents, the rules tightened years ago: the discount is generally unavailable for gains accruing after 8 May 2012, though a partial discount can apply for periods when you were an Australian resident. If your residency changed during the holding period, this needs professional attention.

There’s also a niche bonus worth knowing: investors providing affordable rental housing to eligible tenants may qualify for an additional discount of up to 10%, taking the total discount as high as 60%. The eligibility criteria are strict — don’t assume it applies without checking.

Counting the 12 months (this is where people go wrong)

The rule says “more than 12 months.” In practice:

Start date: the contract date you acquired the asset (not settlement)
End date: the contract date you disposed of it (not settlement)
Exclude both dates from the count

Buy on 15 March 2025 (contract) and sell on 15 March 2026 (contract) and you have not held it for more than 12 months — you’ve held it for exactly 12 months, and exactly isn’t enough. Sell on 16 March and you qualify.

For property bought off the plan, the clock starts at the contract date — which can be years before settlement. That’s good news: by the time you settle, you may already be most of the way to the discount.

Shares and managed funds work the same way, but watch out for corporate actions. A share split or bonus issue generally doesn’t reset the clock. But if you participate in a buy-back, merger or demerger, the CGT rules can treat you as disposing of one asset and acquiring another — potentially restarting the 12 months. Check before accepting that takeover offer.

Worked example: shares vs property

The discount works identically across asset types. What differs is usually the size of the gain and the costs involved.

Shares. Emma bought $60,000 of ETF units in June 2024 and sold them for $95,000 in August 2026 — a 26-month hold.

Gross gain: $35,000
No capital losses to apply
50% discount: $17,500 taxable gain
At the 30% marginal rate (income $45,001–$135,000 in 2026-27), her tax on the gain is $17,500 × 30% = $5,250 (plus Medicare levy)

Property. The same maths on a $180,000 property gain held 5 years: discount to $90,000, taxed at her marginal rate. At 30%, that’s $27,000 instead of $54,000. The discount saved her $27,000 — more than most people’s entire annual tax bill on their salary.

This is why holding period is a genuine investment decision, not just a tax footnote. On a large property gain, selling in month 11 instead of month 13 can be a $20,000+ mistake.

Model both scenarios in our free CGT calculator — toggle the holding period and watch what the discount does to the final bill.

The discount and your other concessions

The 50% discount doesn’t operate in isolation. The order of operations for a property sale with multiple concessions:

Work out the gross gain (sale price minus cost base)
Apply any exemptions first — e.g. the main residence exemption or partial exemption shrinks the gain before anything else
Subtract capital losses — current year losses, then carried-forward losses
Apply the 50% discount — to whatever remains
Add to assessable income — taxed at your marginal rate plus Medicare levy

Small business owners get an additional layer: the small business CGT concessions (15-year exemption, 50% active asset reduction, retirement exemption, rollover) can apply on top of the general 50% discount in some cases. If you’re selling business premises or business goodwill, the stacking of these concessions can legitimately reduce a large gain to almost nothing. This is specialist territory — but it’s the single highest-value area of CGT planning in Australia.

Five ways people lose the discount

1. Selling on day 364. The most expensive impatience in Australian tax. Check contract dates, exclude both endpoints, and if you’re close, wait.

2. Holding the asset in a company. No discount, ever. If you’re choosing a structure for a new investment, model the CGT outcome before you commit — changing structures later usually triggers CGT itself.

3. Forgetting the discount doesn’t apply to the loss side. Capital losses can’t be “discounted” — they’re subtracted in full before the discount. And you can’t use the discount to create or increase a capital loss.

4. Assuming foreign residency doesn’t matter. If you were a temporary resident for part of the holding period, the discount may be reduced or denied for the post-8 May 2012 portion. The ATO has been active in this area.

5. Not keeping acquisition records. No contract date, no discount. The ATO can and does ask for evidence of when you acquired the asset. For shares, keep your contract notes or broker statements; for property, the purchase contract.

Frequently asked questions

Do I need to hold for 12 months and a day?
Effectively yes — “more than 12 months” means 12 months plus at least one day, measured contract date to contract date excluding both dates.

Does the discount apply to crypto?
Yes, crypto is a CGT asset like any other. Hold for more than 12 months as an individual and the 50% discount applies to the gain.

Can companies get any CGT discount?
No. Companies are specifically excluded from the CGT discount. They may benefit from other concessions (like the small business concessions), but not the 50% discount.

What if I have capital losses — do I still get the discount?
Yes, but losses are applied first. On a $100,000 gain with $30,000 of losses, you discount the remaining $70,000 to $35,000.

Does the discount apply if I inherited the asset?
You generally inherit the deceased’s acquisition date for discount purposes — so an asset they held for years can qualify immediately in your hands. But the main residence rules for inherited dwellings are separate and have their own two-year window.

Is the 50% discount changing?
It has been legislated for decades and applies for 2026-27. Any change would require new legislation — but it’s always worth confirming the current rules before a major sale, as tax law does change.

The bottom line

The 50% CGT discount is the closest thing Australian tax law offers to free money: hold for a year and a day, halve your taxable gain. The rules are mechanical, the traps are well-documented, and the payoff for getting it right is enormous relative to the effort involved.

Before you sell anything significant, run the numbers both ways — with and without the discount — in our free CGT calculator. And if the asset is property, read our complete guide to CGT on property for the exemptions that stack on top.

October 5, 2026