Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 115 - Discount capital gains and certain trust capital gains  

Subdivision 115-B - Discount percentage  

SECTION 115-125   Investors disposing of property used for affordable housing  

Object

115-125(1)    
The object of this section is to increase the discount percentage to the extent that the * discount capital gain relates to a * dwelling used to * provide affordable housing.

When this section applies

115-125(2)    
This section applies to a * discount capital gain if:

(a)    you are an individual; and

(b)    either:

(i) you make the discount capital gain from a * CGT event happening in relation to a * CGT asset that is your * ownership interest in a * dwelling; or

(ii) because of section 115-215 , Division 102 applies to you as if you had made the discount capital gain for a * capital gain of a trust covered by subsection (3) ; and

(c)    where subparagraph (b)(ii) applies - the trust ' s capital gain was made directly, or indirectly through one or more entities that are all covered by subsection (3), from a CGT event happening in relation to a CGT asset that is an ownership interest in a dwelling; and

(d)    the dwelling was used to * provide affordable housing on at least 1095 days:

(i) before the CGT event; and

(ii) during your, or the relevant trustee ' s or partner ' s, * ownership period of that dwelling; and

(iii) on or after 1 January 2018.

The days mentioned in paragraph (d) need not be consecutive.

Note 1:

1095 days is the same as 3 years.

Note 2:

It may be possible to choose indexation as an alternative to a discount under this section (see subsection (6) ).

115-125(3)    
This subsection covers the following:

(a)    a trust, other than a * superannuation fund or a public unit trust (within the meaning of section 102P of the Income Tax Assessment Act 1936 );

(b)    

(Repealed by No 49 of 2026)

(c)    a partnership.

Note:

For paragraph (a) , a trust includes a managed investment trust.

Discount percentage

115-125(4)    
The percentage resulting from this section is the sum of:

(a)    

either:

(i) 50% if neither section 115-105 nor 115-110 (about foreign or temporary residents) applies to the * discount capital gain; or

(ii) the * discount percentage that, apart from this section, would result from section 115-115 if section 115-105 or 115-110 applies to the discount capital gain; and

(b)    the result (expressed as a percentage) of subsection (5) .

115-125(5)    
Work out the following:

* Discount percentage that would apply to the * discount capital gain apart from this section	×	Affordable housing days
5		Total ownership days

where:

affordable housing days
means the number of days during that * ownership period (see paragraph (2)(d) ) of the * dwelling, and on or after 1 January 2018, on which:

(a) the dwelling was used to * provide affordable housing; and

(b) you were neither a foreign resident nor a * temporary resident.

total ownership days
means the number of days during that * ownership period (see paragraph (2)(d) ) of the * dwelling, less the number of days after 8 May 2012 during that ownership period that you were a foreign resident or a * temporary resident.

Indexation may be able to be chosen as an alternative

115-125(6)    

If the percentage that would result from this section for you and the * discount capital gain is 60%, then, despite subsection (2) , the following person may choose for this section not to apply to the discount capital gain:

(a)    if you make the discount capital gain in the way described in subparagraph (2)(b)(i) - you;

(b)    if you make the discount capital gain in the way described in subparagraph (2)(b)(ii) - the trustee of the trust.

Such a choice by the trustee applies to you in a similar way to a choice made by you for a gain covered by paragraph (a) .

Note:

Instead, the cost base of the CGT asset may be able to be indexed (see subsection 110-36(1A) ).