Tax Planning
Tax Planning for Investors: Navigating the Upcoming CGT Reforms
Major changes to Capital Gains Tax (CGT) are coming in July 2027—this article breaks down what investors need to know, strategize, and action now.
By NomadicTax Research Team • 5-8 min read • July 23, 2026
## What’s Changing
Australia is replacing the **50% CGT discount** for individuals, trusts, and partnerships with two key mechanisms from **1 July 2027**: cost base indexation (i.e. adjusting the purchase price for inflation) and a **minimum tax rate of 30%** on realised capital gains. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai)) Additionally, negative gearing for residential properties will be limited to **new builds only**, applying for properties acquired after **7:30pm AEST on 12 May 2026**. Existing investments are grandfathered. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Why It Matters
- For long-term investments, the removal of the fixed 50% discount means investors will increasingly focus on holding periods, inflation impacts, and tax costs.
- Property investors can only claim negative gearing deductions for new builds after the transition point, so opportunities in existing properties may diminish.
- Minimum tax rate ensures a floor, limiting how much tax avoidance is possible—even for trusts.
## Practical Steps You Can Take Now
1. **Review your portfolio**: Identify assets likely to realize significant gains post-July 2027. If you’ve acquired property or shares before 12 May 2026 or earlier, the old rules may still apply after the change.
2. **Time disposals wisely**: If holding non-new builds or trust interests, consider whether it makes sense to realize gains under the current regime before the new one begins.
3. **Structure ownership**: Entities like discretionary trusts may face a minimum 30% rate too. Look into rollover relief availability (which will be available for a limited time after 1 July 2027) for timely restructuring. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
4. **Cost base record keeping**: Maintain detailed records of acquisition cost, dates, and any improvements so that cost base indexation is easier when it's applied.
5. **Consult with a tax advisor**: Especially for complex holdings or foreign residency issues, since there will be amendments to foreign resident CGT regimes and stronger penalties for tax adviser misconduct. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
## Example Scenario
- *Sarah*, an individual, bought shares in June 2020. She plans to sell in August 2027: Without CGT reforms, she would get a 50% discount on any gain. Under new rules, she will only get indexation (which typically reduces gains compared to nominal price increases) and may owe **at least 30% tax on the real gain**.
- *Oliver*, who invested in an established residential property (not a new build) in April 2026, will *not* be able to negative gear after 1 July 2027. But because his investment is pre-announcement (pre 12 May 2026), special grandfathering rules allow some deductions for now.
## Key Takeaways
- The transition date of **1 July 2027** is fixed for most CGT and negative gearing changes.
- Early action can yield tax savings—but requires clear records and sometimes structural changes.
- Costs and returns may shift, so recalibrate investment strategies now to avoid unpleasant surprises later.
Being prepared is advantage: start planning now to align holdings, timing, and structures so you're best positioned under the new law.