07/07/2026
🏠📈 MAJOR CAPITAL GAINS TAX CHANGES FROM 1 JULY 2027
Australia’s Capital Gains Tax rules are changing for many individuals, trusts and partnerships.
The changes are now law and will generally apply to gains that accrue from:
📅 1 July 2027
The current 50% CGT discount will be replaced for many affected gains with a new system based on:
✅ Inflation-adjusted cost base
✅ Tax on the real gain above inflation
✅ A minimum 30% tax rate on relevant capital gains
These changes may affect property investors, share investors, cryptocurrency investors, family trusts and business owners.
Here is a simple explanation.
What is Capital Gains Tax?
Capital Gains Tax is not a separate tax.
A capital gain is generally added to your taxable income when you sell or dispose of an asset.
A simple calculation is:
Sale proceeds − cost base = capital gain
Example:
Purchase price and eligible costs: $500,000
Sale price: $800,000
Capital gain: $300,000
The cost base may include eligible amounts such as:
• Purchase price
• Stamp duty
• Legal fees
• Buyers-agent fees
• Selling-agent commission
• Advertising costs
• Capital improvements
Good records can significantly reduce the risk of paying too much tax.
How do the current rules work?
Under the current rules, an Australian resident individual or eligible trust may generally receive a 50% CGT discount where the asset has been held for at least 12 months.
Example:
Capital gain: $300,000
50% discount: $150,000
Amount included in taxable income: $150,000
That $150,000 is then taxed at the person’s marginal tax rate.
The 50% discount does not mean the tax rate is 50%.
It means only half of the eligible gain is included in taxable income.
Companies do not generally receive the ordinary 50% CGT discount.
What changes from 1 July 2027?
1️⃣ Inflation-based cost-base indexation
The cost base will be adjusted to recognise inflation.
This means the tax calculation focuses more on the real increase in value above inflation.
Example:
Original cost base: $500,000
Indexed cost base: $600,000
Sale price: $800,000
Real capital gain:
$800,000 − $600,000 = $200,000
Instead of automatically reducing the nominal gain by 50%, the new system adjusts the cost base for inflation.
2️⃣ Minimum 30% tax on relevant gains
A minimum 30% tax rate will apply to certain real capital gains.
This does not necessarily mean that everyone pays an extra 30% on top of their normal tax.
Broadly, the calculation checks whether the tax attributable to the relevant capital gain is at least 30%.
Where the tax would otherwise be below that level, an additional amount may apply.
This may particularly affect people planning to sell assets in a low-income year, including:
• Retirees
• People taking a career break
• Non-working spouses
• Trust beneficiaries
• Investors waiting until retirement to sell
• Taxpayers with large deductions
Selling in a low-income year may no longer provide the same tax benefit for affected gains.
3️⃣ Existing assets are not fully reset
The new rules generally apply only to gains accruing from 1 July 2027.
This means an asset already owned before that date may need a transitional calculation.
The gain may need to be divided into:
• Gain accruing before 1 July 2027
• Gain accruing from 1 July 2027 onward
Different rules may apply to each part.
Example:
Property purchased in 2022: $600,000
Value around 1 July 2027: $750,000
Later sale price: $900,000
The overall gain may need to be separated between the pre-2027 period and the post-2027 period.
The final calculation may be more complex than simply using a valuation, but reliable market-value evidence around 1 July 2027 may still be important.
Is the new system always worse?
No.
The result depends on:
• Inflation
• Capital growth
• Length of ownership
• Other taxable income
• Capital losses
• Ownership structure
• The type of asset
Example where the current 50% discount may be better
Purchase price: $500,000
Sale price: $900,000
Indexed cost base: $600,000
Current discount method:
Capital gain: $400,000
Taxable gain after 50% discount: $200,000
Indexation method:
Real gain: $300,000
In this example, the current discount method may produce the lower taxable gain.
Example where indexation may be better
Purchase price: $500,000
Sale price: $700,000
Indexed cost base: $650,000
Current discount method:
Taxable gain: $100,000
Indexation method:
Real gain: $50,000
In this example, indexation may produce the lower gain before applying the minimum-tax rules.
There is no single answer for every investor.
Which assets may be affected?
The changes may apply to gains from:
🏠 Investment properties
📈 Shares and ETFs
₿ Cryptocurrency
🏢 Business interests
📊 Managed funds
👨👩👧 Family trusts
📄 Units in private trusts
💼 Other CGT assets
Different rules may apply to companies, SMSFs, foreign residents and small businesses.
What about your main residence?
The main-residence CGT exemption remains important.
A qualifying family home may still be fully exempt.
However, a partial CGT liability may arise where:
• The home was rented
• A room was used for Airbnb
• Part of the home was used exclusively for business
• The property was not your main residence for the full ownership period
• You chose another property as your main residence
• You were a foreign resident when the property was sold
• The property was owned by a company or trust
The new rules do not make every home sale taxable.
The first question is still whether the main-residence exemption applies.
Property investors
Property investors should review:
✅ Purchase date
✅ Contract and settlement records
✅ Stamp duty and legal costs
✅ Renovations and improvements
✅ Depreciation and capital works claimed
✅ Periods of private use
✅ Main-residence history
✅ Ownership structure
✅ Market evidence around 1 July 2027
✅ Expected sale date
Capital works deductions claimed or claimable may reduce the cost base and increase the future capital gain.
Shares and cryptocurrency
Share and ETF investors should retain:
• Contract notes
• Brokerage records
• Dividend-reinvestment details
• Share-split and demerger information
• Return-of-capital statements
• Managed fund tax statements
Cryptocurrency investors should keep:
• Full exchange reports
• Wallet records
• Buy and sale history
• Swap transactions
• Fees
• Australian-dollar values at transaction dates
A crypto-to-crypto swap may trigger a CGT event even where no Australian dollars are received.
Trusts
Family trusts may also be affected.
The result will depend on:
• The trust deed
• Which beneficiary receives the gain
• Whether the gain is streamed correctly
• The beneficiary’s tax position
• Capital losses
• The minimum-tax calculation
A trust does not automatically avoid the new 30% minimum tax.
Capital losses remain important
Capital losses can generally be used only against capital gains.
They cannot usually reduce salary or ordinary business income.
Prior-year capital losses may significantly reduce a future taxable gain.
Make sure your accountant knows about all carried-forward capital losses, even if they arose many years ago.
Should you sell before 1 July 2027?
Not necessarily.
Selling early may trigger:
• Immediate CGT
• Agent and legal fees
• Loan discharge costs
• Loss of future growth
• Reinvestment risk
• Stamp duty on replacement assets
The right decision requires a comparison of:
• Tax if sold before 1 July 2027
• Tax if sold later
• Expected future growth
• Inflation
• Cash flow
• Transaction costs
• Ownership structure
• Investment goals
Do not sell a good asset only because the tax rules are changing.
What should investors do now?
Before 1 July 2027:
✅ Prepare a list of all CGT assets
✅ Confirm acquisition dates
✅ Reconstruct missing cost bases
✅ Keep renovation and improvement invoices
✅ Confirm prior-year capital losses
✅ Review trust and ownership structures
✅ Consider whether market-value evidence may be required
✅ Model selling before and after 1 July 2027
✅ Seek advice before transferring or restructuring assets
Transferring an asset to another person, company, trust or SMSF may itself trigger CGT, stamp duty, legal costs and refinancing consequences.
Key takeaway
From 1 July 2027:
📌 The current 50% CGT discount changes for many individuals, trusts and partnerships
📌 Cost bases will be adjusted for inflation
📌 A minimum 30% tax may apply to relevant real gains
📌 Existing assets may require transitional calculations
📌 Good records will become even more important
The best action depends on the asset, ownership structure, cost base, expected growth, other income and sale timing.
📞 Before selling, transferring, gifting or restructuring a major asset, contact your Clarity Advisor account manager.
Clarity Advisor
https://clarityadvisor.au
Better Advice | Better Life
General information only. Capital Gains Tax outcomes depend on the asset, acquisition date, ownership structure, residency, cost base, capital losses, exemptions and individual circumstances. Seek professional advice before disposing of or restructuring an asset.
