Tax Planning
How Australia’s 2026-27 Changes to Capital Gains Tax Will Affect Investors
From July 2027 the 50% CGT discount will be replaced for most taxpayers—learn how cost-base indexation and a 30% minimum tax will reshape investment decisions.
By NomadicTax Research Team • 5-8 min read • June 18, 2026
## What’s changing with CGT
Australia’s Federal Budget 2026-27 introduces sweeping reforms to Capital Gains Tax (CGT) that take effect **1 July 2027**. The hallmark shift is the replacement of the long-standing **50% discount** with a system based on **cost-base indexation** for inflation plus the introduction of a **30% minimum tax** on real capital gains accrued from that date. ([ashurst.com](https://www.ashurst.com/en/insights/australia-federal-budget-2026-2027-key-tax-measures/?utm_source=openai))
## Who’s affected—and who’s not
Affected:
* Individuals, trusts and partnerships holding assets (shares, property, etc.) with gains accruing from 1 July 2027.([austax.tools](https://austax.tools/tax-insights/whats-changing-australian-tax-2026-27/?utm_source=openai))
* Investors deciding between holding vs selling before the changes. Cap gains realized after that date will follow new rules. Existing assets still benefit from 50% discount for gains accruing before 1 July 2027.([community.ato.gov.au](https://community.ato.gov.au/s/question/a0JMo0000051pYfMAI/p00419654?utm_source=openai))
Not affected or partially exempt:
* Main residence exemption remains.([ashurst.com](https://www.ashurst.com/en/insights/australia-federal-budget-2026-2027-key-tax-measures/?utm_source=openai))
* Some affordable housing discounts and small business CGT concessions will be retained.([kpmg.com](https://kpmg.com/au/en/insights/australian-federal-budget.html?utm_source=openai))
* New builds—investments in newly built residential property—may retain favorable treatment (choosing between old and new arrangements).([kpmg.com](https://kpmg.com/au/en/insights/australian-federal-budget.html?utm_source=openai))
## Practical implications & examples
* If you bought shares years ago, gains on those held until mid-2027 will still enjoy 50% discount for the period up to 30 June 2027; post-that date increases to be taxed under indexation + minimum 30%.
* Example: Asset bought for AUD 100,000 in 2018, sold for AUD 160,000 in 2028. With discount: gain AUD 60,000 taxed at your marginal rate, then discounted by 50%. Under new rules: cost base indexed for inflation to 2027, then gains from 2027 onwards taxed with at least 30% minimum tax.
## Actionable advice for investors now
1. **Review your asset portfolio**: identify assets likely to be sold after 1 July 2027. Consider whether selling earlier (while discount still applies) makes sense.
2. **Plan large investments** in new builds if you seek to retain favorable CGT treatment.
3. **Document cost bases now**, keep records of acquisition cost + improvements. Clear documentation crucial with indexation.
4. **Seek pre-legislation clarity**: as of now, reforms are passed or in parliament, but full details (e.g. how gains that lap the 1 July boundary are treated) may still be clarified via regulations or ATO rulings.
## Why it matters
These reforms significantly alter the risk-return profile of long-term investments. The more you hold past the 1 July 2027 cutoff, the more exposed you are to inflation adjustments rather than simple proportionate discounts. They also potentially increase effective tax paid on gains and may influence investor timing, asset class preference, and structuring.
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