2026 Federal Budget
Capital Gains Tax (CGT) Changes
50% CGT discount effectively abolished
From 1 July 2027, the current 50% CGT discount for individuals, trusts and partnerships will be replaced with:
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CPI cost-base indexation, and
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a minimum 30% tax rate on real capital gains.
How the new system works
Instead of automatically halving the gain:
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the asset cost base will be indexed for inflation,
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tax will apply to the “real” gain above inflation,
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but a minimum 30% effective tax rate will apply to many gains.
Transitional CGT treatment
Assets already owned before 1 July 2027 receive split treatment:
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gains accrued up to 30 June 2027 retain the existing 50% discount,
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gains after 1 July 2027 use the new indexation method.
Pre-CGT assets
Even pre-20 September 1985 assets are partly affected:
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gains accrued before 1 July 2027 remain exempt,
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future gains after that date may fall into the new regime.
New-build concession
Investors in qualifying new builds can choose between:
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the existing 50% discount system, or
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the new indexed CGT method.
Practical effect
The reforms are expected to:
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increase tax on high-growth assets,
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reduce the attractiveness of long-term speculative property investing,
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reduce benefits of deferring capital gains.