Australia's 2027 CGT changes: what they mean for your investments
The 50% capital gains tax discount — a cornerstone of Australian investment strategy since 1999 — disappears on 1 July 2027. Here's how the new rules work, who pays more, and what decisions you need to make before the deadline.
Key dates & numbers
Last day under old rules
30 Jun 2027
contract date, not settlement
New system starts
1 Jul 2027
indexation + 30% floor
Old discount
50%
of all gains held 12+ months
New floor discount
30%
inflation component also removed
The old system: how the 50% discount worked
Since September 1999, Australians who held an asset for more than 12 months before selling paid capital gains tax on only half the gain. If you bought shares for $100,000 and sold for $300,000, your taxable capital gain was $100,000 — not $200,000. At the 47% top marginal rate, that saved $47,000 in tax.
This was — and remains — one of the most generous investment tax concessions in the developed world. It applied regardless of inflation, holding period beyond 12 months, or income level. A gain made in 13 months received the same treatment as a gain made over 30 years.
The 2026 federal budget announced its replacement, taking effect 1 July 2027.
The new system: indexation + 30% floor
From 1 July 2027, assets held for more than 12 months will be assessed using a new two-part method. You use whichever produces the lower taxable gain:
Option A — Indexation
Adjust your cost base upward by the change in CPI from purchase date to sale date. Only the gain above inflation is taxable — at your full marginal rate.
Option B — 30% floor
Pay tax on 70% of the nominal gain (i.e. a 30% discount). This is the floor — it applies if indexation produces a higher taxable amount.
In practice, the ATO will calculate both and apply the more favourable. For most assets purchased in the last decade — when inflation was relatively low — the 30% floor will likely produce the lower result. For assets bought in the 1980s or early 1990s, when inflation was high, indexation may be more favourable.
Important
Worked example: shares held for 5 years
Assume: bought $50,000 of shares in 2022, now worth $150,000. Total gain: $100,000. Owner earns $120,000 salary (37% + 2% Medicare = 39% marginal rate on gains). CPI increase over the period: approximately 18%.
| Before 1 Jul 2027 | After 1 Jul 2027 | Difference | |
|---|---|---|---|
| Nominal gain | $100,000 | $100,000 | — |
| Discount applied | 50% | 30% floor | — |
| Inflation adjustment | None | −$9,000 | — |
| Taxable gain | $50,000 | $70,000 | +$20,000 |
| Tax payable (39%) | $19,500 | $27,300 | +$7,800 |
| Net take-home from sale | $130,500 | $122,700 | −$7,800 |
Indexation ($9,000 inflation adjustment) was applied above. The 30% floor without indexation would produce $70,000 taxable — the same result, so the floor is binding here.
Run your own numbers
CGT 2027 Calculator
Enter your asset, purchase price, and expected sale price to see the exact tax difference under old vs new rules — and whether selling before 30 June 2027 makes sense for you.
Calculate my CGT →How the change affects different asset classes
Shares and ETFs
The most straightforward case. Long-term ETF investors with large unrealised gains — the kind accumulated over a decade of regular contributions to VGS or VAS — will pay more CGT on any sale after 1 July 2027. For ETF investors who were planning to rebalance, switch funds, or sell down in early retirement, the timing of that decision relative to the deadline has meaningful tax consequences.
ETFs held inside superannuation are not affected. The super fund pays 15% CGT (10% for assets held over 12 months) and those rates are unchanged by the 2026 budget. This makes super an even more attractive long-term vehicle relative to personally-held investments.
Investment property
Property investors face a compounding change: both the CGT discount cut and the negative gearing restriction arrive on the same date. For an investment property purchased in 2018 for $700,000 now worth $1,100,000, the gain is $400,000. Under old rules at the top marginal rate, the tax is $94,000. Under the new 30% floor, it rises to $131,600 — an extra $37,600.
For investors with multiple properties or long holding periods, these numbers compound substantially. Property with high gains and high-income owners are most affected.
Note
Small business assets
Small business CGT concessions (the 15-year exemption, retirement exemption, and rollover) are separate from the general 50% discount and are not affected by these changes. Business owners who qualify for the small business concessions will continue to receive those benefits in full.
Negative gearing: what's actually changing
From 1 July 2027, new purchases of establishedresidential properties cannot be negatively geared against other income. If you buy an existing house or apartment after that date and the rental income doesn't cover your costs, those losses can only be offset against future income from the same property — not against your salary.
Two important exceptions apply: new builds and brand-new properties remain fully gearable, and all existing negatively geared properties are grandfathered. If you already own a negatively geared property, nothing changes for you after 1 July 2027.
✓ Still fully gearable
- Existing investment properties (grandfathered)
- New residential builds (house and land, off-the-plan)
- Commercial property (no change)
- Shares, ETFs, margin lending
✗ Restricted from 1 Jul 2027
- New purchases of established residential properties
- Losses can only offset future rental income, not salary
What happens to assets you hold through the changeover?
If you own an asset today and sell it after 1 July 2027, your gain is split proportionally — the time before the changeover uses the old 50% discount, and the time after uses the new rules. This is a straight-line time apportionment, not based on actual prices at the changeover date.
For example: you bought shares in January 2020 and sell them in January 2030 (10 years total holding). The gain is split: 7.5 years pre-2027 (75%) and 2.5 years post-2027 (25%). The 75% portion uses the 50% discount. The 25% portion uses the new 30% floor. Your total tax is a blended rate — more than you'd pay today, but less than if the change were fully applied to the whole gain.
Tip
What should you actually do?
The answer depends entirely on your specific situation. There is no universal right answer — but here are the questions worth asking before June 2027:
Do I have assets with large unrealised gains I was planning to sell anyway?
If you were going to sell before 2030 regardless, selling before 30 June 2027 locks in the 50% discount. The tax saving on a $200,000 gain at the top rate is around $22,000. That's worth calculating precisely.
Am I holding a concentrated position I've been meaning to diversify?
The changeover is a natural forcing function. If you've been putting off diversifying a large single stock or property position, the deadline creates a real tax incentive to act.
Would selling mean triggering a large tax bill I can't fund?
Selling before the deadline only makes sense if you can actually pay the CGT. If selling a property would net $400,000 but trigger $90,000 in tax, ensure you have the liquidity — it can't come from the proceeds if they're needed for reinvestment.
Is the asset inside super?
If so, the 2027 changes don't apply. CGT inside super remains at 15% (10% for 12+ month holdings). No action needed.
Am I close to retirement?
Retirees or near-retirees with lower income in coming years may face a lower effective CGT rate even under the new rules. A $200,000 gain taxed at 19% after the 30% discount may still cost less than triggering the gain at 47% today. Model both scenarios.
Run your own numbers
CGT 2027 Calculator
Enter your asset, purchase price, and expected sale price to see the exact tax difference under old vs new rules — and whether selling before 30 June 2027 makes sense for you.
Calculate my CGT →Frequently asked questions
Does the 2027 CGT change affect my ETF portfolio?
Yes. ETFs held personally outside superannuation are subject to the same CGT rules as shares or property. If you have large unrealised gains in your ETF portfolio and are planning to sell or rebalance after 1 July 2027, you will pay more tax under the new rules than under the 50% discount. The exception is ETFs held inside super — CGT inside superannuation is unchanged.
Is the CGT change retrospective? Do gains I've already made get taxed differently?
No, the change is not retrospective in the traditional sense. Assets owned before 1 July 2027 will have their gains split proportionally — the portion of the gain earned before the change date is taxed under old rules, and the portion earned after is taxed under new rules. This is based on a straight-line time apportionment, not on the actual market prices at the changeover date.
What counts as the 'sale date' for CGT purposes?
For CGT purposes, the relevant date is when the contract is signed (the 'contract date'), not settlement. This is important: if you sign a contract to sell on 30 June 2027 but settle in August, you are assessed under the old 50% discount rules. Make sure any sale you want under the old rules has contracts signed on or before 30 June 2027.
Will negative gearing on my existing investment property still be allowed?
Yes — existing negatively geared properties are fully grandfathered. If you already own an investment property that is negatively geared, nothing changes for you on 1 July 2027. The restriction only applies to new purchases of established properties made on or after that date. New builds and brand-new properties are exempt from the restriction.
Should I sell my investment property before 30 June 2027?
It depends entirely on your specific gain and marginal rate. For properties with large unrealised gains and high-income owners, the tax saving from selling under the old rules can be substantial — potentially tens of thousands of dollars. However, selling also resets your cost base, triggers stamp duty on a replacement, and may not align with your investment strategy. Use the CGT 2027 calculator to see the exact dollar difference for your property before deciding.
This guide is general information only — not personal financial or tax advice. Tax outcomes depend on your individual circumstances. Consult a registered tax agent or financial adviser before making decisions based on this content.