Capital Gains Tax Changes: Why Property Investors Should Start Planning Now

Key Takeaways

The 2026–27 Federal Budget (12 May 2026) replaced the 50% CGT discount for individuals, trusts and partnerships with cost base indexation and a 30% minimum tax on capital gains, applying to gains accruing on or after 1 July 2027. For investment properties held across the commencement date, the critical valuation date is 1 July 2027. Our recommendation for most clients: plan for a single, well-supported valuation as at 1 July 2027, and defer commissioning the valuation until the ATO releases guidance on acceptable valuation methods and any safe harbours.

Note; SMSF’s are required to obtain a valuation as per usual every financial year including 30 June 2026 for all assets including property irrespective of the new capital gains tax changes.

The new rules in brief

• From 1 July 2027, the 50% CGT discount is replaced with CPI cost base indexation for CGT assets held more than 12 months by individuals, trusts and partnerships;
• Minimum tax: a 30% minimum tax applies to net capital gains accruing after 1 July 2027 (applied after indexation), removing the benefit of realising gains in low-income years;
• Transitional protection: gains accruing before 1 July 2027 retain the current 50% discount treatment. Pre-CGT (pre-20 September 1985) assets lose their blanket exemption for gains accruing after commencement;
• Carve-outs: assets held in superannuation funds (including SMSFs) are excluded and retain the one-third discount. Investors in eligible new builds may elect between the 50% discount and the new rules;
• Negative gearing: separately, negative gearing on established residential property is quarantined from 1 July 2027, with properties held at 7:30pm AEST on 12 May 2026 exempt.

Why 1 July 2027 is the valuation date that matters

Under the transitional arrangements, an asset acquired before 1 July 2027 and sold afterwards is effectively split into two gain components:

• Original cost base to value at 1 July 2027 is taxed under the current rules, with the 50% CGT discount available.
• Value at 1 July 2027 to disposal proceeds taxed under the new regime, with the 1 July 2027 value operating as the new cost base, indexed for inflation, and subject to the 30% minimum rate.

The 1 July 2027 value therefore determines how much of the total lifetime gain enjoys the (generally more favourable) 50% discount versus the indexed regime.

Assessment of each valuation date

30 June / 1 July 2027 valuation — essential

• Crystallises the boundary between the discount-eligible pre-commencement gain and the indexed post-commencement gain.
• For real property, a formal valuation from a qualified independent valuer, dated as close to 1 July 2027 as practicable, is the gold standard for evidentiary purposes.
• The ATO has flagged it will provide valuation tools; these may offer a lower-cost safe-harbour route for standard residential property. Detailed methodology and safe harbours remain subject to final ATO guidance.
• Where clients hold multiple properties or hard-to-value assets (commercial property, development sites, property in trusts), early engagement of a valuer ahead of the 30 June 2027 rush is prudent.

Recommendation

All investments that attract capital gains tax should be valued at 30 June 2027, including shares, holiday houses, and investment properties.

Key dates

Date	Significance
7:30 pm AEST, 12 May 2026	Budget announcement. Properties held at this time are exempt from the negative gearing quarantining (acquisition-date test, no valuation required).
30 June 2026	No CGT significance under the measure. Optional corroborating valuation for hard-to-value assets only.
1 July 2027	Commencement. Asset value at this date becomes the new cost base for the indexed regime; the 50% discount applies to gains accrued up to this date. Formal valuation recommended for investment property.
1 July 2028	30% minimum tax on discretionary trusts commences (separate measure; three-year restructure rollover relief available from 1 July 2027).

Next Steps

While these proposed changes don’t take effect until 1 July 2027, planning ahead today can help you avoid unnecessary costs and ensure you’re well prepared when the time comes.

If you own an investment property or other capital gains tax assets and would like to understand how these changes may affect your long-term strategy, speak with your Navwealth adviser. We’ll help you understand the implications and determine the right timing for any future valuations based on your personal circumstances.

If you need help to take the next steps with confidence, contact our team here.

Important: The ATO lists these measures as law; however, detailed valuation methodology, safe harbours and administrative guidance remain to be finalised. This note is general in nature, is based on information available as at 10 July 2026, and does not constitute personal tax or financial advice. Clients should obtain advice specific to their circumstances before acting.