Capital gains tax changes from 1 July 2027: indexation and the 30% minimum tax
The 50% CGT discount has been part of Australian investing since 1999. From 1 July 2027 it is replaced for most assets. Here is what that means for property, shares and businesses.
Published
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received royal assent on 26 June 2026. Its capital gains changes start on 1 July 2027 — which makes the next eight months a planning window for anyone holding assets with large gains.
What changes
| Until 30 June 2027 | From 1 July 2027 | |
|---|---|---|
| Individuals and trusts | 50% discount after 12 months | Cost base indexation, with a 30% minimum tax on capital gains |
| Companies | No discount | No discount |
| Complying super funds | One-third discount | One-third discount continues |
| Eligible new residential dwellings | 50% discount | 50% discount continues |
| Pre-CGT assets (before 20 Sept 1985) | Exempt | Lose pre-CGT status after 30 June 2027 for future gains |
Transition
Assets sold before 1 July 2027 are taxed under the existing rules. Assets bought before and sold after that date are split: existing rules apply to the gain up to 1 July 2027, and the new rules apply to the gain after it. That means a market value at 1 July 2027 — or an apportionment method — will matter for many investors.
Who comes out ahead, and who doesn’t
Indexation removes the inflationary part of a gain from tax, while the discount removed half the gain regardless of inflation. For assets that grow much faster than inflation, the new system generally produces more tax. For assets that grow close to inflation, it can produce less. The 30% minimum tax puts a floor under the rate on capital gains for higher and lower earners alike.
Business owners
The four small business CGT concessions remain, and the 50% active asset reduction becomes available to more businesses as the turnover threshold rises from $2 million to $10 million from 1 July 2027. For owners planning an exit in the next few years, the sale timing, structure and concession eligibility need to be modelled together. Our guide to preparing a business for sale covers the runway.
What we are doing with clients now
Listing every asset with a material unrealised gain, recording its likely value at 1 July 2027, and modelling sell-before versus hold-after. For some, bringing forward a sale makes sense. For most, the right answer is better record-keeping and no rush — but it should be a decision, not a default.
Related changes
The same reforms limit negative gearing on established residential property bought after 12 May 2026 (explained here), prohibit SMSFs from borrowing to buy residential property, and are being followed by a proposed minimum tax on discretionary trusts from 1 July 2028, which is not yet law.
Common questions
1 July 2027. Gains accrued before that date are taxed under the existing rules, including the 50% discount.
The main residence exemption is unaffected.
They remain, and the 50% active asset reduction becomes available to businesses with aggregated turnover up to $10 million from 1 July 2027.
Sources
- Holding Redlich — Update on status of key tax measures announced in Budget 2026–27 (July 2026)
- Chartered Accountants ANZ — Federal Budget 2026–27 capital gains tax changes (May 2026)
- Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Cth)
General information
This article is general advice only and does not take into account your objectives, financial situation or needs. Consider its appropriateness, read the relevant PDS and TMD, and obtain personal advice before acting. Tax commentary is general and not personal taxation advice.
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