Tax Planning
Navigating Australia’s New CGT Regime: What Investors Must Know Before July 2027
Major changes are coming to Australia’s Capital Gains Tax (CGT) system from 1 July 2027—learn how the shift from a 50% discount to inflation-based indexation plus a minimum 30% rate on real gains will affect you and how to prepare now.
By NomadicTax Research Team • 6 min read • June 3, 2026
## Overview of the Upcoming CGT Changes
Starting **1 July 2027**, the Australian Government will implement major reforms to the taxation of capital gains. The current 50% CGT discount for assets held over 12 months will be replaced with **indexation based on inflation**, and a **minimum tax rate of 30%** will apply to *real capital gains*—that is, gains after accounting for inflation. Patties of these changes are beginning to roll out in legislation proposed as part of the 2026-27 Federal Budget. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Who is Affected and When
| Investor Type | Gains Accrued Before 1 July 2027 | Gains Accrued From 1 July 2027 Onwards |
|--------------|-------------------------------|----------------------------------------|
| Assets acquired before 1 July 2027, sold after that date | Continue to use the 50% discount for gains up to 30 June 2027; gains after that date use indexation + minimum tax | N/A |
| Assets acquired on or after 1 July 2027 | Use indexation + minimum 30% tax for all gain periods | Same |
| Assets from pre-CGT era (pre-20 September 1985) | Previously exempt on sale, but gains accrued from 1 July 2027 will be taxable under new system | Use indexation + 30% minimum rate |
| New residential builds | Will have **choice** between old rules (50% discount) or the new indexation/minimum tax system | Same choice from 1 July 2027 onwards |
This means that even if you bought property or shares years ago, when you sell after July 2027, you’ll be taxed differently on portions of gain accruing after that date. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Implications for Investors & Actionable Steps
### Financial Planning
- **Revisit your portfolio timing:** Consider whether it makes sense to sell some assets before 1 July 2027 to lock in gains under the current 50% discount. Be careful about transaction costs and any relevance to holding periods.
- **Valuation as at 1 July 2027:** For assets held before 1 July 2027 and sold after, a valuation at that date or using apportionment formulas will determine cost base for gains after that date. Plan ahead to obtain reliable valuations. ([bartier.com.au](https://www.bartier.com.au/insights/articles/federal-budget-2026-27-key-tax-changes-and-what-clients-need-to-know?utm_source=openai))
### Structural Strategies
- **New builds exception:** For new residential property investments acquired after Budget night (12 May 2026), you’ll have flexibility to choose between the old 50% CGT discount or new rules. If you’re planning property investment, targeting new builds may preserve choice. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Trust vs holding personally:** Individuals, trusts, and partnerships are all impacted. For old trusts, review your current structure—distribution, ownership, exit strategies to minimize tax exposure. Changing structure now won’t avoid the changes, but timing and asset location might reduce exposure.
### Compliance & Record-keeping
- Keep robust records of acquisition date, historical valuations, costs, improvements. For assets held before 1 July 2027 you’ll need the opening value for new cost base calculations.
- For pre-CGT assets (before 1985), ensure you have documentation—even for those previously exempt. When they become taxable for gains accruing from July 2027, documentation matters.
- Monitor legislation drafts, exposure bills, and ATO guidance—details like how cost base reset works, valuation methods, exemptions (e.g. for income support recipients) will be crucial. ([budget.gov.au](https://budget.gov.au/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf?utm_source=openai))
## Case Example
Suppose Alice bought shares in 2015 for $10,000 and by 1 July 2027 their value is $25,000. She sells them in 2029 for $30,000. Under the old system, she would apply 50% discount on the entire gain from purchase to sale. Under the new rules:
- Gain up to 1 July 2027: $15,000, 50% discount applies → taxable portion $7,500.
- Gain after 1 July 2027: $5,000, apply indexation and still pay at least 30% minimum tax on the real gain.
Depending on her marginal rate, she may end up paying more tax overall than under old system—especially if gains realized in low-income years.
## Key Takeaways
- The reforms are **prospective**: no retroactive application.
- The changes aim to bring capital gains taxation more in line with real gains and reduce tax arbitrage around timing.
- Timing matters: investment decisions before 1 July 2027 can shape your tax outcome significantly.
- Consult a tax advisor: specific decisions (structure, timing, asset selection) depend heavily on your income, asset class, planned holding period.
> **Actionable tip:** If considering selling assets (property, shares) or restructuring holdings, do so *before* 1 July 2027 when possible—record valuations, assess tax exposure. If entering new investments, examine whether they qualify for the exception for new residential buildings or benefit from favorable timing.