Law: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Act 2026 (passed 25 June 2026, Royal Assent 26 June 2026). Start date: 1 July 2027. The first tax return affected is 2027–28. The apportionment method is still a draft instrument. Further legislation – the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and a bill for a minimum tax on discretionary trusts – was introduced to Parliament on 14 October 2026 and is not yet law.
What passed
- Indexation replaces the 50% discount for gains accruing on or after 1 July 2027, for resident individuals, trusts and partnerships, on assets held for at least 12 months. All cost base elements except the third element (costs of ownership) are indexed to CPI.
- 30% minimum tax on those post-1 July 2027 gains for individuals.
- Pre-CGT assets (acquired before 20 September 1985) become taxable on gains accruing from 1 July 2027. Earlier gains stay exempt.
- Unchanged: the main residence exemption, the small business CGT concessions, super funds’ one-third discount, the 60% discount for eligible affordable housing, and companies (no discount).
- Choice for new housing: investors in eligible new residential dwellings can keep the 50% discount instead of indexation and the minimum tax.
How the new calculation works
If you own an asset on 1 July 2027 and sell it later, the law treats you as having sold it just before 1 July 2027 and bought it back on that day. The gain is split into two parts, both reported in the year you actually sell:
Assets bought on or after 1 July 2027 are wholly under the new rules. If you bought less than 12 months before 1 July 2027 but hold for at least 12 months in total, you get the discount on part 1 and indexation on part 2.
Valuing assets at 30 June 2027
You can use the market value immediately before 1 July 2027, or – for real property and assets without a readily ascertainable market value – an apportionment method set by the Minister. Treasury’s exposure draft (August 2026) works like this:
- Total growth = sale price ÷ purchase price (first element of the cost base)
- Daily growth rate = total growth^(1 ÷ days held) − 1
- Value at 30 June 2027 = purchase price × (1 + daily rate)^(days held to 30 June 2027)
Treasury’s example
Artwork bought 1 July 2016 for $520,000 (+$2,000 fees), sold 30 June 2034 for $1,500,000 (+$3,000 fees). Apportioned value at 30 June 2027: $993,429.55. Deferred gain: $471,429.55 (discountable). With CPI moving from 105.54 to 125.45, the indexed cost base is $1,183,838.90 and the post-reform gain is $316,161.10. Our engine reproduces these figures to the cent – see the test results.
The ATO’s guidance (13 October 2026) says the Government is still developing the apportionment method. Keep your purchase records, and consider whether a valuation at 30 June 2027 suits you better – for an asset that rose sharply before 2027 a valuation may give a larger discounted part.
The 30% minimum tax
For individuals, if the income tax attributable to your post-1 July 2027 net capital gain is less than 30% of that gain, you pay the difference (the “minimum tax gap amount”). Our calculator works it out as:
It mainly affects people on lower incomes in the year of sale – such as retirees not receiving income support – who would otherwise pay tax on the gain at 0%, 14% or 15%. Higher earners already pay 30% or more at the margin, so usually see no top-up. This is the method in section 119-10 of the Act: it uses your basic income tax liability at the rate scale, before tax offsets and excluding the Medicare levy. The minimum tax capital gain is measured after capital losses and small business concessions, is reduced by certain gift deductions, and the result is rounded down to whole dollars. It applies to individuals who were Australian residents at any time in the income year.
Examples: old rules vs new rules
Calculated with our engine, assuming 2.5% annual CPI and 2027–28 rates for later years. “If 50% discount continued” applies the current method to the whole gain.
| Scenario | Tax if 50% discount continued | Tax under the new rules | Of which 30% minimum tax top-up |
|---|---|---|---|
| Investment property, $120k income Bought July 2020 for $700k, sold July 2032 for $1.25m | $109,675 | $106,264 | $0 |
| Shares, $60k income Bought 2015 for $100k, worth $200k at 30 June 2027, sold 2030 for $260k | $26,050 | $32,783 | $0 |
| Retiree (not on Age Pension), $30k income Bought July 2027 for $600k, sold July 2035 for $900k | $49,851 | $57,961 | $0 |
Try your own numbers: enter a sale date after 1 July 2027 in the property, share or general calculator.
Who is affected
| Taxpayer | From 1 July 2027 |
|---|---|
| Resident individuals | Indexation + 30% minimum tax on post-2027 gains |
| Trusts and partnerships | Indexation for gains flowing to eligible resident individuals; individuals bear the minimum tax |
| Income support recipients (Age Pension, JobSeeker, Family Tax Benefit, Parental Leave Pay and others) | Indexation, but exempt from the minimum tax for any year they receive a listed payment |
| Complying super funds | No change – one-third discount continues |
| Companies | No change – no discount |
| Foreign and temporary residents | Excluded from the indexation regime; existing rules (generally no discount) continue. Part-year residency rules are still to be finalised. |
Negative gearing
From the 2027–28 income year, net losses from established residential properties can only be offset against residential property income and residential capital gains, with any excess carried forward. These quarantined amounts can’t be added to the property’s cost base. Properties acquired (by contract) before 7:30 pm (ACT time) on 12 May 2026 are grandfathered, and new builds, complying super funds and widely held unit trusts are excluded.
What’s still to come
- Final apportionment method – the August 2026 draft instrument hasn’t been finalised yet.
- Tax Reform No. 3 Bill 2026 (introduced 14 October 2026) – CGT clarifications and rollover relief for trusts, the legal definition of “new residential dwelling”, and a 30% minimum tax on discretionary trusts from 1 July 2028. Not yet law.
- Later tranches – the Innovative Business CGT Concession for start-ups, and rules for foreign, temporary and part-year residents.
- ATO guidance on valuations and record keeping.
- Already law: from 2027–28 the small business 50% active asset reduction is available to businesses with aggregated turnover under $10 million (up from $2 million), added by Senate amendment to the Tax Reform No. 1 Act.
We review this page whenever the ATO, Treasury or Parliament publishes new material.
Frequently asked questions
Has the CGT discount been abolished?
For gains accruing from 1 July 2027, yes – for resident individuals, trusts and partnerships it’s replaced by cost base indexation. Gains accrued up to 30 June 2027 still get the 50% discount when you eventually sell. Investors in eligible new residential dwellings can choose to keep the discount instead.
Does the change affect my home?
No. The main residence exemption is unchanged.
Do I need to sell before 30 June 2027?
Not necessarily. Gains that accrue before 1 July 2027 keep the discount even if you sell later – the law splits the gain at that date. Selling only to beat the deadline can bring forward tax and transaction costs. Get advice for your situation.
Who is exempt from the 30% minimum tax?
Anyone who receives a listed income support payment at any time in the income year – including the Age Pension, JobSeeker Payment, Disability Support Pension, Carer Payment, Youth Allowance, Austudy, Family Tax Benefit, Parental Leave Pay and DVA pensions. The minimum tax also doesn’t apply where you choose the discount for an eligible new residential dwelling or affordable housing, and it doesn’t apply to companies or super funds.
Do super funds lose their CGT discount?
No. Complying super funds keep the one-third discount and are outside the new regime. Companies continue to get no discount.
How do I value my assets at 30 June 2027?
Listed shares and major crypto: use the market price at the end of 30 June 2027. For real property and assets without a readily ascertainable value you can get a valuation or use the apportionment method. Treasury’s draft method (August 2026) estimates the value by assuming the asset grew at a constant daily rate over the whole ownership period. The ATO says further guidance is coming.
References
Every figure on this page was checked against these primary sources on 16 October 2026.
- ATO – Capital gains tax reform (published 13 Oct 2026)
- Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49, 2026) – Federal Register of Legislation
- Parliament of Australia – Bills Digest No. 67 2025–26: Treasury Laws Amendment (Tax Reform No. 1) Bill 2026
- Treasury – Draft apportionment method (exposure draft explanatory statement, Aug 2026)
- ATO – CGT discount
- ATO – Indexing the cost base
- ATO – Your main residence (home)
General information only – not financial or tax advice. See our disclaimer. Spotted an error? Email hello@cgtcalculatoraustralia.com.