Quick summary: The capital gains tax changes announced in the May Budget are now law. From 1 July 2027, the 50% CGT discount goes, replaced by an inflation adjustment and a 30% minimum tax on gains. The good news: everything you've gained up to 30 June 2027 keeps the old rules, whenever you sell. The catch: you'll need to show what your assets were worth on 1 July 2027.
Back in May, we covered the Federal Budget tax reforms. Three big pillars of Australian tax planning were being rewritten, and the capital gains tax discount was one of them. At the time, they were proposals. Parliament still had to have its say.
Well, parliament has spoken. The CGT changes became law on 26 June 2026. They start on 1 July 2027.
That gives you eight months or so. Not to panic. To get organised.
What's changed with capital gains tax
For 25 years, the deal was simple. Hold an asset for more than 12 months, sell it, and only half your gain got taxed.
From 1 July 2027, that 50% discount is gone. Two things replace it:
An inflation adjustment. Your purchase price gets lifted by inflation (the technical name is cost base indexation), so you're only taxed on the gain above inflation.
A 30% minimum tax on gains. Even if you sell in a year when your income is low or nil, the gain is taxed at no less than 30%.
The assets affected
It's a wide net. Shares, ETFs, managed funds, investment property, business assets and crypto are all in. So are assets bought before 1985, which have been CGT-free until now. Their growth from 1 July 2027 becomes taxable.
What's not affected
Your family home. Still CGT-free.
Your super. Super funds keep their own CGT rules.
New builds. Investors in newly built homes can choose between the old 50% discount and the new rules.
Small business concessions. These continue, and the turnover threshold for the 50% active asset reduction rises from $2 million to $10 million.
People on income support. If you receive the Age Pension or another government income support payment in the year you sell, the 30% minimum tax doesn't apply to you. The 50% discount still goes, though.
Assets
Shares
ETFs
Managed funds
Investment property
Business assets
Crypto
Pre-1985 assets
Your family home
Still CGT-free.
Your super
Keeps its own CGT rules.
New builds
Choose the old 50% discount or the new rules.
Small business concessions
Continue. 50% active asset reduction threshold rises from $2m to $10m turnover.
People on income support
Exempt from the 30% minimum tax. The 50% discount still goes.
The stocktake: 1 July 2027
Here's the good news. Gains you've built up before 1 July 2027 keep the 50% discount, whenever you sell. That could be next year or in 2045. The old rules stay locked in for that slice.
From that date, your gain gets split in two. Growth before 1 July 2027, old rules. Growth after it, new rules.
You may hear this called a "deemed disposal". On paper, the tax office treats you as if you sold everything on 1 July 2027 and bought it straight back at that day's value. It's a paper exercise only.
You don't get a tax bill on the day. Nothing goes in your tax return. It sits quietly in the background until you sell, and then the two slices get worked out.
The catch is the evidence. When you do sell, you'll need to show what the asset was worth on 1 July 2027. That's on you, not the tax office.
Think of it as a stocktake. Shops do one on a set day so they know exactly what was on the shelves at that moment. Your stocktake is 1 July 2027: what you own, and what each thing was worth on that day. You might not sell for years. But when you do, that stocktake is what splits your gain into the old-rules slice and the new-rules slice. Skip it, and you're relying on the government's formula to guess for you.
The stocktake: 1 July 2027
Old rules
Keep the 50% CGT discount, no matter when you sell.
New rules
Discount goes. Inflation adjustment plus a 30% minimum tax on gains.
Listed shares and ETFs
The quoted market price on the day.
Investment property
A property valuation, as at 1 July 2027.
Business and unlisted assets
A business valuation, with the evidence behind the number.
The government formula
Estimates the value when you sell. Assumes steady growth.
Two ways to work out your 1 July 2027 value
The government's explainer gives you two options. You choose in your tax return in the year you sell.
Option 1: A valuation as at 1 July 2027
Listed shares and ETFs: the quoted market price on the day. You can get this from your online trading account or from us.
Investment property: a property valuation, as at 1 July 2027.
A business or unlisted investments: a business valuation, with the evidence behind the number.
Option 2: The government's formula
If you don't have a valuation, a formula estimates your 1 July 2027 value when you eventually sell. It works off your asset's average growth rate across the whole time you've owned it.
In other words, it assumes your asset grew at the same steady pace every year. Property and businesses rarely behave that politely.
The formula hasn't been released yet. The ATO says it will provide tools to do the sums.
The takeaway: a proper valuation gives you the choice between the two. No valuation, no choice.
A client can obtain a valuation as at 1 July 2027 and still choose the government's apportionment method if that produces a more favourable CGT outcome.
Importantly, the choice does not need to be made until the client lodges their tax return for the financial year in which they eventually sell the asset.
Does the valuation have to be done on 1 July 2027?
No. The law fixes the point in time, not the day the paperwork gets done. What you need is the market value of the asset as at 1 July 2027 (technically, just before it).
Shares, ETFs and managed funds: the closing price on 30 June 2027. That's a matter of record, so there's nothing to book.
Property and businesses: a valuer gives an opinion of value as at that date. The report can be prepared before, around or after 1 July 2027. The ATO accepts valuations done after the fact, as long as the report says it's retrospective, uses only what was known at the time, and is backed by evidence.
There's no set window in the legislation. In practice, the closer to the date, the better. A valuation done years later has to reconstruct the market as it was, and that's harder to defend if the ATO asks questions. Valuers will also be busy around mid-2027, so booking early makes sense.
What to do before 30 June 2027
List everything you own outside super. Shares, ETFs, managed funds, property, business interests, crypto.
Dig out your purchase records. Dates, prices, costs. You'll need them for both slices of the gain.
If you own property or a business, book your valuer early. A lot of people will want the same thing in the same week.
If you're thinking of selling something with a big gain, talk to us and your accountant first. Timing matters more than ever.
Review how your investments are owned. Any new money you invest from here deserves a proper think about structure before it goes in.
Ready to talk it through?
You've got until 30 June 2027 to get your records straight and your valuations lined up. If you're a Firefly client, we'll be raising this at your next review, but if you'd like to get ahead of it, give us a call.
If you're not a client yet and you'd like a hand working out what it all means for you, book a chat.
Firefly Financial provides financial planning for Gen Xers and Baby Boomers across Perth and WA, the quiet achievers and the life lovers.
Frequently Asked Questions
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The new capital gains tax rules start on 1 July 2027. The legislation received royal assent on 26 June 2026, so it's now law, not a proposal. Any sale before 1 July 2027 is taxed entirely under the current rules, including the 50% discount for assets held longer than 12 months.
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No, not for the growth you've already built up. Gains up to 30 June 2027 keep the 50% discount, no matter when you sell. Only growth from 1 July 2027 onwards falls under the new rules. That's why having evidence of your asset's value at 1 July 2027 is so important.
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No. The tax office draws a line through your assets on that date, but nothing is payable and nothing goes in your tax return. The two slices of your gain are only calculated in the year you sell. If you never sell, no capital gains tax is triggered.
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Almost everything you own outside super and your family home. That includes shares, ETFs, managed funds, investment property, business assets and crypto. Assets bought before 1985, which have been CGT-free until now, are also caught for growth from 1 July 2027. New builds and small business assets get special treatment.
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No. You need the market value as at 1 July 2027, but the valuation report itself can be prepared before, around or after that date. The ATO accepts retrospective valuations provided the report states it's retrospective, relies only on information available at the time, and is supported by evidence. For listed shares and ETFs, the closing price on 30 June 2027 is your value. For property and businesses, the closer the valuation is to the date, the easier it is to defend.
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It's not compulsory, but it's worth serious thought. A valuation as at 1 July 2027 gives you hard evidence and lets you choose between your valuation and the government's formula when you sell. Without one, the formula is your only option, and it assumes steady growth every year. Valuers will be busy, so book early.
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Not really, and it’s a risky thing to rely on. An agent’s appraisal is a sales pitch with a number on it. Agents aren’t independent (they want your listing), and the ATO knows it. The same goes for online estimates from property websites: no one’s inspected the property, so they’re not valuation reports at all.
What the ATO wants is an independent valuation from a qualified professional valuer (in WA, a Certified Practising Valuer). A proper report states the purpose, the valuation date (1 July 2027), whether it was done after the fact, what was inspected, the comparable sales and other evidence behind the number, and the valuer’s independence. The valuer’s fee can’t depend on the result.
There’s a practical reason to do it properly. If you engage and properly instruct a professional valuer and the ATO later disagrees with the number, you generally won’t face penalties. Rely on an agent’s appraisal or your own guess and that protection isn’t there.
One more thing: not all professional valuations are equal. A desktop or kerbside report is a lower tier and may be treated as an indicative figure only. For an investment property with a big gain, a full inspection report is the one worth paying for.
ATO — Market valuation for tax purposes — what a report should contain; professional valuations more credible; penalty position -
It's how the tax office separates your old gains from your new ones. On paper, you're treated as having sold each asset on 1 July 2027 and bought it back at that day's value. No tax is payable at that point and nothing goes in your tax return. The two parts of your gain are only worked out in the year you actually sell.
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Gains that build up from 1 July 2027 are taxed at no less than 30%, even if your other income is low. In the government's own example, someone earning $25,000 who makes a $10,000 gain pays $3,000 in tax on it instead of $1,400. People receiving the Age Pension or other government income support in the year they sell are exempt from the minimum.
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Not automatically. Your gains up to that date keep the 50% discount anyway, so there's no cliff to beat. Selling early can mean paying tax sooner and wearing transaction costs for no benefit. If you were already planning to sell, timing is worth a conversation with your adviser and accountant before you act.
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No. Super funds, including SMSFs, keep their existing capital gains tax treatment. That's one reason super is getting a fresh look as a home for high-growth investments. Contribution caps and access rules still apply, so it needs to be weighed up as part of your overall plan.
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This information is current as at 29 September 2026.
Kalfocus Pty Ltd AR No. 463978 is a Corporate Authorised Representative of Firefly Financial Pty Ltd AFSL No. 700033, ABN 88 687 477 612. General Advice Warning: Any advice in this article is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making any decisions.