Capital gains tax changes Australia will introduce important new rules from 1 July 2027, affecting how some capital gains are calculated and taxed.

These changes are already law. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026, after being announced in the 2026-27 Budget on 12 May 2026.

For many Australian resident individuals, the headline shift is simple. The long-standing 50% CGT discount will no longer apply to most gains made from CGT events happening on or after 1 July 2027. In its place, the law introduces cost base indexation plus a 30% minimum tax on net capital gains.

That sounds straightforward, but the real impact depends on several things:

• when the CGT event happens
• when the gain accrued
• the type of asset
• whether you are an individual, trust, partnership, company or super fund
• whether a transitional rule applies
• whether the asset is a new residential dwelling or affordable housing

Old rules vs new rules at a glance

Who or what	CGT events up to 30 June 2027	CGT events from 1 July 2027
Resident individuals	50% discount if eligible (generally held 12+ months)	Cost base indexation plus 30% minimum tax on net capital gains
Trusts and partnerships	50% discount if eligible	Affected by the replacement of the 50% discount
Companies	No 50% discount	Not covered by the indexation change
Complying super funds	Own tax settings	Not covered by the indexation change
Assets already held at 1 July 2027	–	Gain before 1 July 2027 keeps old rules; later gain goes to the new system
New dwellings and affordable housing	50% discount if eligible	Can choose to keep the 50% discount

The Australian Taxation Office is still publishing guidance on how these rules work in practice, especially around the transitional choices and record-keeping expectations. You can follow the ATO’s legislation page here: ATO tax reform, capital gains tax changes.

When do the new CGT rules start?

The new rules start from 1 July 2027. That date matters because the tax treatment can be very different depending on whether your CGT event happens:

• on or before 30 June 2027, or
• on or after 1 July 2027

For eligible individuals, trusts and partnerships, the 50% discount still applies to gains from CGT events up to 30 June 2027. From 1 July 2027, the law changes for many taxpayers, but transitional rules protect gains that built up before the start date for assets already held at that time.

In practical terms, if you own an investment property, shares or a business asset on 1 July 2027, you may need to separate the gain into:

• the part that accrued before 1 July 2027, and
• the part that accrued from 1 July 2027 onward

Who is affected by the capital gains tax changes?

The biggest changes are aimed at Australian resident individuals, and they also affect structures such as trusts and partnerships that have traditionally relied on the 50% discount for eligible gains. At a high level:

• Australian resident individuals move to the new system for relevant gains from 1 July 2027
• Trusts and partnerships are also affected by the replacement of the 50% discount in the new regime
• Companies are not covered by the cost base indexation change
• Complying super funds are not covered by the cost base indexation change

That distinction matters. A company does not get the 50% CGT discount under the current rules anyway, so the practical analysis for companies can be different from the analysis for individuals. Complying super funds already have their own tax settings, so they are carved out of the indexation change as well.

How do the transitional CGT rules work for assets held at 1 July 2027?

This is one of the most important parts of the reform. If you hold an asset at 1 July 2027, the gain that accrued before that date keeps the old rules, including the 50% discount where the usual eligibility rules are met. The gain that accrues after that date is dealt with under the new system.

The law points to two broad pathways for working this out:

This means the transition is not only about tax law. It is also about evidence. For many taxpayers, especially property owners, the practical challenge will be proving:

• original purchase price
• acquisition costs such as stamp duty and legal fees
• capital improvements over time
• depreciation and capital works history where relevant
• ownership dates
• market value just before 1 July 2027, if that method is used

What replaces the 50% CGT discount from 1 July 2027?

From 1 July 2027, for many Australian resident individuals, the 50% CGT discount is replaced by:

• cost base indexation, and
• a 30% minimum tax on net capital gains

This is a major structural change. Under the old system, the tax outcome for a long-held asset often turned on whether the asset was owned for at least 12 months and whether the taxpayer qualified for the 50% discount. Under the new system, indexation becomes part of the calculation, which means inflation and the timing of expenditure can matter more directly.

Be careful about over-simplifying the change. The new framework does not mean every taxpayer will automatically pay more tax, or less tax, in every case. The result will depend on:

• how long the asset was held
• how much of the gain accrued before 1 July 2027
• the size of the gain after indexation
• your residency status
• whether an exception applies
• the way your broader tax profile interacts with the 30% minimum tax on net capital gains

Do property investors still get the 50% CGT discount?

Yes, but only in certain situations. The 50% discount still applies to eligible CGT events up to 30 June 2027. After that date, property investors need to ask three separate questions:

1. Did the CGT event happen before or after 1 July 2027?
2. Was the asset already held at 1 July 2027?
3. Does a special carve-out apply?

For standard investment properties held by individuals, the old discount can still remain relevant because any gain that accrued before 1 July 2027 is preserved under the old rules if eligibility is met.

If you are trying to estimate a possible sale outcome, start with a rough projection using our capital gains tax calculator, then review the result carefully because calculators may not fully reflect every transitional issue.

Worked example: investment property bought in 2015 for $600,000

Here is a simple example to show how the change can affect a property owner.

Example facts

Detail	Assumption
Purchased	July 2015
Purchase price	$600,000
Type of property	Investment property, not a main residence
Owner	Australian resident individual
Market value just before 1 July 2027	$1,000,000
Sold	August 2029 for $1,120,000
Ignored for simplicity	Selling costs, legal fees, stamp duty, depreciation adjustments and capital improvements

This is only a simplified illustration. Real calculations can be very different once costs, capital works, ownership structure and ATO guidance are taken into account.

Old rules: 50% discount on the full gain

If the whole gain were taxed under the old discount method:

Sale price	$1,120,000
Less cost base	$600,000
Capital gain	$520,000
Taxable capital gain after 50% discount	$260,000

That is the kind of broad outcome many investors are used to thinking about.

New rules: the transitional approach

Because the property is held at 1 July 2027, the gain is effectively split into two periods. Using the market value method in this example:

	Pre-1 July 2027 portion	Post-1 July 2027 portion
Starting value	$600,000 (original cost base)	$1,000,000 (value just before 1 July 2027)
End value	$1,000,000	$1,120,000 (sale in August 2029)
Gain	$400,000	$120,000
Rules that apply	Old rules, 50% discount if eligible	New system: cost base indexation plus 30% minimum tax
Taxable gain	$200,000	Depends on indexation (not estimated here)

The exact indexation outcome depends on the relevant factors and official mechanics, so we have not put an estimated indexed figure here. The key point is that only the growth from 1 July 2027 onward is pushed into the new framework if the market value transitional method is used.

Why this example matters

Two investors with the same final sale price can have very different outcomes depending on:

• whether they owned the property before 1 July 2027
• whether they obtain a reliable market valuation at the transition date
• whether they choose market value or apportionment, if both are available
• what records they have kept

For many long-term property owners, the transition rules may preserve a substantial part of the historical discount outcome. That is why rushed decisions based only on headlines can be risky.

What should you do before 30 June 2027?

For many taxpayers, the period before the end of the 2026-27 income year is the window for preparation. Here are five steps worth taking.

1. Consider a market valuation

If you hold an asset that may be sold after 1 July 2027, a valuation just before the new rules start may become a key piece of evidence. This is particularly important for:

• investment properties
• business real property
• valuable shareholdings in private entities
• development sites
• assets with large unrealised gains

Do not wait until years later and try to reconstruct value with limited evidence. A valuation done at the time is usually far easier to support.

2. Clean up your records

Gather and organise:

• purchase contracts
• settlement statements
• stamp duty records
• legal invoices
• loan and borrowing documents where relevant
• invoices for renovations and capital improvements
• depreciation schedules
• prior tax returns showing capital losses or prior CGT treatment

The stronger your records, the easier it is to support both the old-rule and new-rule parts of the calculation.

3. Review ownership structures

The tax result may differ depending on whether the asset is held by an individual, a trust, a partnership, a company or a super fund. This does not mean you should restructure in a rush. It means you should understand the consequences before making a decision.

4. Do not sell for tax alone

Tax matters, but it should not be the only reason to sell a good asset. Selling before 30 June 2027 just to preserve the 50% discount may be sensible in some cases, but it may be a poor decision if it means:

• selling into the wrong market
• triggering unnecessary transaction costs
• losing future growth
• disrupting a broader investment plan
• creating cash flow or debt issues

5. Get current advice close to the date

The ATO is still publishing guidance, and the legislative instrument for apportionment details will affect how some assets are treated in practice. Advice obtained too early and never revisited can date quickly.

Common mistakes people make with the new CGT rules

The mistake	What to know instead
Assuming every gain after 1 July 2027 loses all access to the old discount	Not correct. For assets held at 1 July 2027, gains that accrued before then keep the old rules if eligibility is met.
Thinking contract and settlement dates never matter	Timing still matters. CGT outcomes depend on the relevant event date and the surrounding facts. Do not assume a sale near the cut-off will be simple.
Forgetting to get a valuation	For many taxpayers, not documenting market value around 30 June 2027 could become one of the biggest avoidable mistakes.
Mixing up individuals with companies and super funds	Companies and complying super funds are not covered by the indexation change. Entity type matters.
Relying on rough estimates or online commentary	Headline summaries can miss transitional rules, exceptions and ATO administration issues. Use calculators as a starting point only.
Selling solely because of fear	Good tax planning is not panic selling. A rushed sale can easily undo the benefit you were hoping to preserve.

How do the new CGT changes interact with negative gearing?

Many investors look at CGT and negative gearing together, especially when reviewing whether to keep or sell a rental property. They are connected, but they are not the same thing:

• Negative gearing generally concerns the annual income tax result from holding an investment property, such as deductible interest and property expenses exceeding rental income.
• CGT deals with the tax result when the asset is sold.

If you are reviewing a property strategy around the 2027 CGT change, it helps to look at both sides together. For more background, see our guide to negative gearing in Australia.

FAQ about Australia’s 2027 capital gains tax changes

Final thoughts

The new capital gains tax rules are not just a rate change. They create a transition from one system to another, and that makes timing, asset type, entity type and evidence much more important than many taxpayers realise.

For property owners and long-term investors, the biggest practical issues are often not theoretical. They are about records, valuations, dates and understanding which part of the gain sits under which set of rules.

The ATO is still publishing guidance, so this area will keep developing. If you are planning to sell an asset, transfer ownership, restructure holdings or simply want to understand your likely position before 30 June 2027, it is worth reviewing the numbers early.

This article is general information only and is not personal financial or tax advice.