The 2026 Federal Budget announced big changes to Capital Gains Tax (CGT) and negative gearing. These start from 1 July 2027 and will affect property investors, share owners, crypto holders, small business owners and other asset investors.
Current CGT Rules (Up until 30 June 2027)
If you hold an asset for more than 12 months, you currently receive a 50% discount on the capital gain.
The taxable half is added to your income and taxed at your normal marginal rate (up to 47%).
What Changes from 1 July 2027?
The government is replacing the simple 50% discount with a new system:
- Inflation Indexation
Your purchase cost is adjusted for inflation using CPI. You only pay tax on the real gain (growth above inflation). - 30% Minimum Tax Rate
Importantly, you must pay at least 30% tax on your net capital gain after indexation. - Applies to Most Assets
This covers houses, shares, crypto, small businesses etc. It affects individuals, trusts, and partnerships.
That said, there is good news for new homes: Investors buying or building new residential properties can choose the old 50% discount or the new system.
What About Assets You Already Own?
- Gains on sale of assets up to 30 June 2027 still qualify for the 50% discount.
- Gains after 1 July 2027 use the new rules.
- Pre-1985 assets (pre-CGT) will have a value reset on 1 July 2027 — only future gains are taxed.
Unaffected:
- Your family home (main residence exemption)
- Superannuation funds (keep their discount)
- Small business CGT concessions
Simple Example Comparison
| Situation | Old Rule (50% Discount) | New Rule (from 2027) |
|---|---|---|
| Short-term sale (<12m) | Full gain taxed | Full gain taxed |
| Long-term sale | 50% of gain taxed | Real gain (after inflation) + min 30% tax |
| New build property | 50% discount | Choice of old or new |
What Should You Do Now?
- Review your current investments and consider timing any planned sales.
- Investors should review their portfolio. In addition, they should consider new residential properties
- Speak to an accountant or financial adviser — rules have complex details.
- Keep an eye on final legislation as details may be refined.
Important: These are announced changes, not yet law. Always check official ATO or Treasury sources for updates.
Have a chat to Deb at Stellar Accounts for how these proposed changes may impact your investments and/or small business – https://stellaraccounts.com.au/contact-us/