Tax Planning
Tax Planning in Australia: Navigating the New CGT Discount Reforms from July 2027
Australia’s Budget 2026–27 introduces sweeping changes to how capital gains are taxed—this article shows you how to prepare, with examples and strategies to adapt.
By NomadicTax Research Team • 5-8 min read • June 17, 2026
## What’s Changing
- From **1 July 2027**, the long-standing **50% Capital Gains Tax (CGT) discount** is being replaced by a **cost-base indexation method** coupled with a **minimum 30% tax rate** on real gains. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
- **New builds** will largely be exempted, offering taxpayers a choice between the old 50% discount (for new builds) or the new indexation/minimum-rate method. Existing properties “grandfathered” under old rules as of Budget night (12 May 2026). ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
## What This Means in Practice
- If you hold an investment property or asset acquired **before 1 July 2027**, only the portion of the gain accruing **after** that date will be taxed under new rules. Gains accrued **before** retain the old discount. ([taxathand.com](https://www.taxathand.com/article/41265/Australia/2026/Federal-Budget-2026-27-Tax-developments-for-individuals?utm_source=openai))
- New build assets allow you to **choose** to use the old CGT discount if construction commenced after Budget announcement. This gives a window for developers or future owners to time acquisitions. ([community.ato.gov.au](https://community.ato.gov.au/s/question/a0JMo000004zcyv/p-00419401?utm_source=openai))
## Strategic Tax Planning Tips
- **Review your asset portfolio**: Identify which assets are new builds, which were held prior to 12 May 2026, and which gain accrual might be substantial after 1 July 2027. Plan sales accordingly.
- **Consider timing**: If planning to sell, wait until closer to or after 1 July 2027 only if the gains largely accrued before that date to benefit from the discount.
- **Track cost base indexation** carefully: the base cost as at 1 July 2027 becomes critical. Keep records of acquisitions, improvements and valuation benchmarks.
- **New build vs existing property investment shift**: investing in new builds may retain old benefits; this could push preference toward townhouses, apartments built after Budget date—but always examine supply, resale prospects and location.
## Examples
- *Case A*: Sarah bought shares in listed company in 2018. She realizes a capital gain of $50,000 in 2028. Portion accrued before 1 July 2027 taxed with 50% discount; portion after taxed on new rules—minimum 30% rate unless tax computed via rate schedule method.
- *Case B*: Tom invests in a new build apartment after 12 May 2026. He sells it in 2028. He can elect to use the 50% discount (older rule) for the entire gain or choose the new rule. Decision: compare after-tax proceeds, cash flow, possible sale price and costs.
## Actionable Steps
1. Inventory all CGT assets, purchase/acquisition dates, whether new builds.
2. Estimate gains if sold in coming years—split accrual pre- and post-1 July 2027.
3. Consult with a tax adviser to compute Net Present Value (NPV) of sale under both old and new regimes.
4. For new builds, get legal confirmation of status and construction dates.
5. Update financial models and wealth planning strategies to reflect higher effective tax on capital gains.
**Bottom line**: if you hold assets likely to generate large gains post-1 July 2027—especially non-new builds—you’ll want to plan sales and purchases to maximise the remaining window of the 50% CGT discount or shift strategy toward qualifying new build investments.