• Capital gains tax (CGT) discount for foreign resident individuals

    The CGT discount, previously known as the CGT 50% discount, was available to foreign resident individuals on taxable Australian property.

    In the 2012–13 Budget, the government announced changes to the application of the CGT discount. These changes became law on 29 June 2013.

    What has changed?

    From 8 May 2012, foreign or temporary resident individuals must meet certain eligibility conditions to apply the CGT discount.

    For CGT events occurring after 8 May 2012, the application of a CGT discount percentage will depend on:

    • whether the CGT asset was held before or after 8 May 2012
    • the residency status of the individual who has the capital gain.

    Who is affected?

    This change affects individuals (including a beneficiary of a trust and a partner in a partnership), who are:

    • a foreign or temporary resident
    • an Australian resident with a period of foreign residency after that date
    • had a discount capital gain from a CGT event that occurred after 8 May 2012.

    If you are unsure about your residency status, you can use our Are you a resident tool.

    You are not affected by this change if the CGT event occurred before 8 May 2012.

    How do the changes affect foreign or temporary residents?

    You must calculate the CGT discount you can apply to the capital gain if you are a foreign or temporary resident individual and, after 8 May 2012, you have a discount capital gain from a CGT event.

    If you were a foreign or temporary resident on 8 May 2012, you may choose to get a market value for the CGT asset as at 8 May 2012 and use a market value calculation. This will apportion the CGT discount to take into account the capital gain you have that was accrued before 8 May 2012.

    You can use the CGT discount calculator to determine your eligibility and calculate the CGT discount you can apply.

    How do the changes affect Australian residents?

    You must calculate the CGT discount you can apply to the capital gain you have if you are an Australian resident and, after 8 May 2012, you have:

    • a capital gain from a CGT event
    • a period of foreign or temporary residency.

    The period of foreign or temporary residency after 8 May 2012 is taken into account when calculating the CGT discount you can apply to your capital gain.

    You will need to use the CGT discount for individuals calculator to determine your eligibility and calculate the CGT discount percentage you can apply.

    How to calculate your CGT discount percentage

    Use the Are you a residentThis link opens in a new window tool to work out if you are resident of Australia for tax purposes.

    Use the Capital gains tax record keeping toolThis link opens in a new window to check:

    • if you are eligible for a discount
    • the amount of discount that can be applied to your capital gain.

    If you sold more than one asset, use the calculator for each asset unless you bought and sold each of the assets at the same time.

    • Last modified: 04 Jul 2016QC 35657