Australia

CGT changes from 1 July 2027: why the value on that date matters

Last reviewed 13 October 2026 · General information, not advice

In short
  • From 1 July 2027 the 50% CGT discount is replaced by indexation of the cost base, plus a 30% minimum tax on capital gains for individuals.
  • Only growth after 1 July 2027 is affected. Assets you hold on 30 June 2027 are treated as sold and bought back at market value on 1 July 2027.
  • From 2027–28, rental losses on residential property bought after 7:30pm AEST on 12 May 2026 can't reduce your other income (new builds exempt).
  • The most useful thing to do now: keep good records, and plan a valuation close to 1 July 2027 if you'll still own the property.

What changes for capital gains

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 is now law. For individuals, trusts and partnerships, capital gains that build up after 1 July 2027 no longer get the 50% discount. Instead, the cost base is indexed for inflation, and individuals pay at least 30% tax on the gain. Companies and complying super funds sit outside this regime.

The 1 July 2027 split

For an asset you still own on 30 June 2027, the law treats it as sold just before 1 July 2027 and bought back straight after, at its market value. The gain up to that date keeps the 50% discount (and is only taxed when you actually sell); the growth after it is indexed. Market value on 1 July 2027 is the default way to split the two — which is why a valuation on that date matters.

Property bought before 20 September 1985 (pre-CGT) keeps its exemption for growth up to 1 July 2027, but its cost base resets to the market value on that date, and growth after it becomes taxable.

Check whether a valuation is likely to matter for you →

Negative gearing from 2027–28

From the 2027–28 income year, losses from residential rental property can no longer be offset against your other income (like salary). Instead they're carried forward against future residential rental income, or into the capital gains calculation when you sell.

  • Grandfathered: property you held at 7:30pm AEST on 12 May 2026. What counts is when you entered into the contract, not settlement.
  • New builds: exempt, but the official definition of a “new residential dwelling” hadn't been published at the review date.

What to do now

  1. Find your purchase contract and note the date you signed it.
  2. Pull together your cost base records: contract, settlement statement, stamp duty, and invoices for improvements.
  3. If you'll still own the property on 30 June 2027, plan a registered valuer's report dated as close to 1 July 2027 as possible.
  4. If the property isn't grandfathered, keep clear year-by-year records of rental income and expenses so any carried-forward losses can be tracked.
  5. Ask your accountant how this applies to you before making decisions based on it.

Still pending

At the review date: the Minister can set an alternative to market value for splitting the gain, the ATO has announced valuation tools, and the new-build definition depends on a ministerial instrument — none of these had been published. We update this guide when they are.

Sources

We check these sources every quarter and update this page when the rules change.