Tax Planning
How Australia’s CGT Reforms Will Reshape Investment Planning from 1 July 2027
Capital Gains Tax is changing in a major way—learn how indexation, minimum rates, and grandfathering will affect your investment strategy.
By NomadicTax Research Team • 5-8 min read • July 25, 2026
## Understanding the Upcoming CGT Changes
Australia’s **Treasury Laws Amendment (Tax Reform No. 1) Act 2026**, which took effect with assent on 26 June 2026, introduces several major shifts to how capital gains are calculated for individuals, trusts, and partnerships. Key among them:
- The existing **50% CGT discount** will be replaced as of **1 July 2027** with a system that adjusts an asset’s cost base for inflation and applies a **minimum 30% tax rate** on gains accruing after that date. ([legislation.gov.au](https://www.legislation.gov.au/C2026A00049/asmade/2026-06-26/text/original/epub/OEBPS/document_1/document_1.html?utm_source=openai))
- If you own an asset acquired before that date (e.g. shares or property), there is **grandfathering**, but careful analysis is required to understand what portion of gains will be taxed under the old versus the new regime. ([aph.gov.au](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7493&utm_source=openai))
## Actionable Steps for Investors and Advisors
1. **Review your acquisition dates**
Determine which assets are held now, when you acquired them, and what gains are likely to accrue post-1 July 2027. Assets acquired before that date may benefit from flash-cut to inflation indexing, only for gains beyond that date to attract the minimum tax rate.
2. **Compare whether to sell earlier**
Because under the current regime (pre-reform), the 50% discount may yield lower tax on any gains realised before reforms commence. If possible, realise gains before the changeover if that saves tax net of legal, market and timing costs.
3. **Structure new investment decisions differently**
For future investments, indexation means long-held assets will see some reduction in real gains tax; nevertheless, minimum rates limit the benefit. Diversify asset types and consider holding inside structures taxed favourably (e.g. certain small-business concessions).
4. **Update trust and partnership agreements**
These changes also apply to trusts and partnerships. Distribution strategies may need to be reworked—deciding which beneficiaries record gains when, including timing of disposals and distributions. Tax agents will be key in optimising tax outcomes.
## Examples for Clarity
- **Example 1:** You bought shares in January 2025 and plan to sell them in mid-2027. Gains up to 1 July 2027 are taxed under the old discount; post-that date, indexation and minimum rate apply. Selling just before 1 July 2027 might allow full 50% discount.
- **Example 2:** A property acquired in 2020 held through 2029. The gain portion up to 1 July 2027 gets old discount, but any further appreciation from 1-07-2027 to sale will be taxed under new rules: cost base indexed, taxed at least 30%.
## Implications for different taxpayers
- **Individuals & Investors:** Those who rely on CGT discounts should anticipate higher taxes on future gains and adjust asset disposition timing.
- **Trustees & Partnerships:** Need to plan distributions carefully and consider restructuring before reforms fully apply.
- **First Home Buyers/New Builds:** Interestingly, the reform also includes carve-outs: new builds offer choice between old and new CGT rules for such assets. ([budget.gov.au](https://budget.gov.au/content/04-tax-reform.htm?utm_source=openai))
## Bottom Line
These CGT changes represent the most significant shift in decades. If you hold assets that may generate capital gains after 1 July 2027, or you run trusts or partnerships, begin planning now: review your investment holdings, tax filing strategy, and get professional advice. The decisions you make before the commencement dates may have substantial tax and financial impact.