The 50% CGT Discount Is Gone. Here's How Long You'd Need to Hold Instead.

Property Brew

Property Brew

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The 50% CGT Discount Is Gone. Here's How Long You'd Need to Hold Instead.

For decades, Australian property investors had a simple rule in their corner: hold for more than 12 months and only half your capital gain gets taxed. It was one of the most powerful and widely used tax concessions in the country.

Well, it has now been removed.

That changes the maths on every investment property in Australia. But it doesn't change the underlying logic of long-term holding. Property has always been a long- term game anyway.

What the discount actually did

Under the old rules, if you bought a property for $500,000 and sold it for $900,000 after holding it for 12 months, only $200,000 of that $400,000 gain hit your taxable income. The other half disappeared, courtesy of the CGT discount.

Now the full $400,000 is taxable. At the top marginal rate, that's a significant difference.

Inflation still works in your favour, it just takes time

Here's what hasn't changed: inflation quietly erodes the real value of your gain every year you hold.

When you buy a property, your cost base stays fixed in nominal dollars. But inflation means those dollars are worth less each year. After enough time, the real gain, your profit adjusted for the purchasing power you've lost to inflation shrinks considerably.

The question is: how many years does it take for inflation to reduce your real, taxable gain to the same level the 50% discount used to give you?

That's exactly what our calculator below answers.

CGT Holding Period Calculator — Property Brew
Free Tool

CGT Holding Period Calculator

How long to hold your property to match the old 50% CGT discount

—
years to match the old 50% CGT discount via inflation
—
real gain at breakeven
Nominal gain
—
sale minus purchase
Old taxable gain
—
50% of nominal gain
Inflation-eroded gain
—
at breakeven year
Property details
Average annual inflation 3.0% p.a.
Taxable gain over time
Real (inflation-adjusted) gain
Old 50% taxable gain
Nominal gain (new law)
How it works: Under the old CGT rules, only 50% of your nominal gain was taxable after 12 months. The government has removed this discount. This calculator shows how many years you need to hold the property so that inflation reduces your real gain to the same amount as the old 50% taxable gain — achieving the same tax benefit through time rather than legislation. Cost base is adjusted by CPI using compound annual growth. This is not financial or tax advice. Consult a registered tax adviser.

How to use it

Enter your purchase price, your expected sale price, and adjust the inflation slider to reflect your outlook — the RBA's long-run target sits around 2.5%, but recent years have tracked higher.

The calculator tells you the holding period at which inflation has done the same work the old 50% discount used to do. The green line on the chart is your real gain declining over time. When it crosses the orange dashed line (the old 50% taxable gain) - that's your breakeven year.

This calculator is for educational purposes only and does not constitute financial or tax advice. Consult a registered tax adviser before making investment decisions.

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