Tax Planning
How Australia’s New CGT Reforms Affect Property Investors and Entrepreneurs
Australia’s recent tax reform will reshape capital gains tax and negative gearing from 1 July 2027—here’s what property investors and start-ups must know now to maintain tax-efficient strategies.
By NomadicTax Research Team • 5-8 min read • July 12, 2026
## Overview of the CGT & Negative Gearing Reforms
Australia has passed significant reforms under the *Treasury Laws Amendment (Tax Reform No. 1) Act 2026*. These changes include:
- **Replacement of the 50% CGT discount** for individuals, trusts and partnerships with inflation-indexation and a **30% minimum tax** on real gains for assets disposed from **1 July 2027**. ([aph.gov.au](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7493&utm_source=openai))
- **Limiting negative gearing** to only **new residential builds** from that same date. Existing investment properties held prior to the announcement remain under the old rules. ([budget.gov.au](https://budget.gov.au/content/04-tax-reform.htm?utm_source=openai))
- Application of the new CGT discount rule to *new builds* will allow investors to choose between old 50% discount or new regime. ([budget.gov.au](https://budget.gov.au/content/04-tax-reform.htm?utm_source=openai))
## Implications by Investor Type
| Investor Type | Current Position (before 1 July 2027) | After Reform (from 1 July 2027) |
|---|---|---|
| Property Investor (own established housing) | Full negative gearing and 50% CGT discount on gains worked into strategy | No negative gearing for new purchases of established housing; only **new builds**; reduced CGT benefits |
| Property Investor (new builds or development business) | Same as above for new builds under current rules | May **opt for 50% CGT discount** for new builds or use new inflation-indexed regime; negative gearing allowed for new builds |
| Serial Entrepreneurs / Small Business Owners | Sale of business assets often takes advantage of CGT discount; financing via losses allowed through negative gearing | CGT discount replaced; must plan earlier exit strategies; past losses remain under old regime; structure investment timing carefully |
## Practical Tax Planning Strategies
- **Time your asset disposals**: Disposing before 1 July 2027 under current rules may preserve the 50% discount. After that date, gains taxed with indexation and floor 30%. If an asset is eligible (e.g. new build), hold until after commencement if the new rules favour you.
- **Assess property purchases carefully**: If buying property purely for investment, buying *new builds* may preserve negative gearing and allow choice of CGT regime. Established dwellings will lose access to negative gearing against ordinary income.
- **Structure your entity types**: Trusts and partnerships must take the changes for CGT and negative gearing into account—e.g. setting up joint ventures in a way that maximizes benefit under new rules.
- **Review finance arrangements**: Losses formerly deductible may be limited; carry forward strategies may be less useful if deductions strictened.
## Example Scenario
> Jane holds shares in a start-up and also owns a rental apartment in an established suburb. She plans to sell shares in August 2027 and buy another investment property. Under old rules, shares gain benefit of 50% discount, and apartment losses help offset other income.
- Under new rules: Share gain taxed with inflation indexation and minimum 30% rate. Apartment: no negative gearing on new property unless it's a new build. Established property still under old rules since prior held.
- Jane could prioritize disposing the shares **before** 1 July 2027 to lock in better capital gains treatment. If buying new property, she should seek new builds.
## Actionable Advice Before July 2027
- Take stock of your portfolio: mark which properties are established vs new build, which assets you plan to sell soon.
- Consult with your tax adviser about cash-flow implications of changing CGT regime.
- For new developments, consider entering contracts **before** Budget night (defined in the announcements) to preserve old negative gearing treatment. The announcement pinned existing property held before **7:30pm AEST, 12 May 2026**, as preserving old rules. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
## Key Take-Home
The tax reforms are sweeping. They significantly reduce the benefits of negative gearing (for established homes) and apply real gain taxation under CGT with floor rates. Investors, entrepreneurs and property buyers need to plan now—both for transactions before and decisions made post-1 July 2027—to optimise for lower tax burden and avoid getting caught by the new rules.