Tax Planning
Tax Planning Strategies Under Australia’s Capital Gains & Negative Gearing Reforms
Australia’s upcoming tax reforms for capital gains and negative gearing reshape the investment landscape—time to update your planning. Here’s how.
By NomadicTax Research Team • 6 min read • July 30, 2026
## Overview of the Reforms
From **1 July 2027**, Australia is implementing major tax changes:
- The **50% capital gains tax (CGT) discount** will be replaced with **indexation for inflation**, along with a **minimum tax rate of 30%** on realised gains. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- Negative gearing for residential property will be **limited to new builds**. Existing investments are largely grandfathered (if held before **12 May 2026**). ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Implications for Investors & Timing
| Scenario | Considerations | Example | Actionable Insight |
|---|---|---|---|
| Holding established property or shares bought before 12 May 2026 | Still eligible for existing negative gearing and CGT discount for those assets, but only for gains arising until 30 June 2027. | If you have shares bought in 2025, profits realised in 2026–27 enjoy the 50% discount. | Review your asset sale plans—consider realising gains before the reforms kick in if advantageous. |
| Considering investment in new builds | New builds keep current negative gearing and CGT discount arrangements until you sell under these rules. | Buying a qualifying new build property in 2026 will still allow full claims under old rules. | Prioritize new builds if you’re planning property investment after confirming eligibility. |
## Tax Planning Techniques to Consider
- **Utilise trusts and partnerships**: CGT changes apply broadly to individuals, trusts, and partnerships. If using discretionary trusts, consider whether the new minimum tax rate alters distribution strategies. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Accelerate realisation of gains or losses**: If you have unrealised losses, you might offset potential gains now before reform applies. Loss harvesting can reduce your tax impact. *Caution: always consider market risks.*
- **Resemble new build investment**: Negative gearing eligibility will be preserved on new builds, even for purchases after the announcement date. Property investors may target developments or off-the-plan properties. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Risks & Considerations
- **Holding period matters**: After 1 July 2027, gains are assessed differently, and inflation indexation may not fully offset your gains for tax purposes.
- **Thresholds and exceptions**: Consult the legislation; some provisions have grandfathering, some exceptions, e.g., certain trusts or new builds. Always check your eligibility.
- **Cash flow impact**: Selling or buying property or shares costs time and money (transaction costs, stamp duty). Plan ahead.
## Action Plan
1. Catalogue all your capital assets—ownership dates, cost bases, when gains likely to be realised.
2. Identify property investments—new builds vs established—and decide whether to invest before/after date thresholds.
3. Seek professional advice, especially trust & partnership structures: changes affect entity –level rate setting.
4. Use modelling tools or advisors to project your 2027–28 income under both old and new tax systems.
By proactively adjusting your strategy, you can reduce surprises and preserve tax benefits before reforms take full effect.