Tax Planning
Strategies for Tax-Planning Ahead of Australia’s 2027 CGT & Negative Gearing Reforms
New Australian Budget reforms make now the time to review your investment portfolio: capital gains discounts are changing and negative gearing will be limited to new builds. Here's how to plan smartly.
By NomadicTax Research Team • 5-8 min read • June 11, 2026
## Understanding the changes before they bite
Australia’s 2026-27 Budget announced several key tax reforms that take effect from **1 July 2027**, notably:
- The **50% Capital Gains Tax (CGT) discount** will be replaced by a cost base indexation method. Plus, a **minimum 30% tax rate on realised capital gains** will apply. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Negative gearing** for residential property will be limited only to **new builds**. Properties acquired before **7:30pm AEST on 12 May 2026** are grandfathered. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Tax-planning strategies to consider now
1. **Time your asset disposals**
- If you hold assets that will generate capital gains, disposing **before 1 July 2027** means you can still use the 50% CGT discount for gains already accrued. After that, indexation + minimum 30% rate applies. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- For investors in new residential builds: if you buy and hold new builds, you may **choose** between the old 50% discount or the new indexation/minimum tax method for those assets. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
2. **Evaluate investment property holdings**
- Plan any negative gearing claims while you still have access: purchases from after 7:30pm AEST on 12 May 2026 will be severely limited. Make sure you understand whether the property counts as a “new build”. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
- Consider deferring purchases of established properties if your plan hinges on negative gearing benefits. Or refocus investment toward new builds where negative gearing is preserved. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
3. **Review your trust strategy**
- If you use discretionary trusts, many will be hit by a **new proposed 30% minimum tax** on trust income from 1 July 2028. Trustees (not just beneficiaries) will pay at least 30% on their taxable income; individual beneficiaries (non-corporate) get a non-refundable credit. ([budget.gov.au](https://budget.gov.au/content/04-tax-reform.htm?utm_source=openai))
- A **3-year rollover relief window** from 1 July 2027 to 30 June 2030 is available for those wishing to restructure out of discretionary trusts. Fixed or widely-held trusts may become more favourable for some. ([pitcher.com.au](https://www.pitcher.com.au/insights/federal-budget-2026-27-tax-reform-key-dates/?utm_source=openai))
4. **Cash-flow & record-keeping matters**
- With tax rates rising (or floor minima), ensure your financial modelling anticipates the increased tax burden. Distributions to beneficiaries via discretionary trusts may need to trigger trustee-level tax obligations. ([bdo.com.au](https://www.bdo.com.au/en-au/insights/tax/articles/2026-federal-budget-what-the-new-30-per-cent-minimum-tax-on-discretionary-trusts-means-for-professi?utm_source=openai))
- As some reforms (like CGT changes) depend on “first realised date” and asset cost base, strong record-keeping of purchase dates, improvements, and market valuations will be essential.
## Examples to illustrate impact
- **Investor A** holds shares bought years ago with large accrued gains. If they sell **before 1 July 2027**, they may enjoy the full 50% discount. If they wait, they get **only indexation + 30% minimum**, potentially increasing tax by several percentage points.
- **Investor B** owns an established rental property purchased after the announcement. From 1 July 2027, losses from that property can't be offset against wage-income, significantly reducing the tax benefit of negative gearing. They might favour buying new builds instead.
- **Small business family trust** distributing income to low-income family members. With the 30% minimum tax from 2028, the trust may owe more tax directly; maybe switching to fixed trust or company could reduce tax overall when beneficiaries’ marginal rates are below 30%.
## Actionable steps to take now
- Run **scenario models**: work out best- and worst-case tax rates post-reform for your assets or properties.
- Consult with a tax accountant about restructuring trusts or investments during **rollover relief window**.
- Review upcoming asset purchases or property acquisitions: weigh existing vs. new builds.
- Clean up records: ensure you have clean purchase and improvement data to support cost basis and discount eligibility.
These reforms mean that structuring, timing, and entity choice are more important than ever. Early action can help smooth the transition and avoid surprises.