CGT reform
On 12 May 2026 as part of the federal Budget 2026–27, the Australian Government announced it would reform CGT arrangements. The first stage of this measure (Treasury Laws Amendment (Tax Reform No. 1) Act 2026External Link) is now law.
These changes do not apply to the 2025–26 tax return.
We will update this page as additional stages of legislation are passed.
CGT changes
From 1 July 2027, the CGT changes will:
- replace the 50% CGT discount for resident individuals trusts and partnerships with cost base indexation on gains that accrue on or after 1 July 2027
- introduce a minimum 30% tax for individuals on certain net capital gains which accrue on or after 1 July 2027
- subject those with pre-CGT assets to CGT for gains accruing on or after 1 July 2027.
Some exemptions will apply.
Date of effect
These changes apply from 1 July 2027. The 2027–28 tax return will be the first tax return that could be affected by the CGT changes. The 2027–28 tax return will not be affected if you don’t have a CGT event during that year.
What is not changing
There are no changes to the:
- meaning of a CGT asset
- framework of a CGT event
- main residence exemption.
Transitional arrangements
If you are an individual or trustee, the changes may affect how you calculate your capital gains or losses. That is where you sell a CGT asset or another CGT event happens to it on or after 1 July 2027.
How you calculate your capital gains or losses under the new law depends on:
- when you first acquired the asset
- how long you have held the asset
- for some assets, choices that you are able to make under the law.
For your eligible CGT assets:
- There is no change for assets purchased and sold prior to 1 July 2027.
- Assets purchased on or after 1 July 2027 will be treated wholly under the new arrangements.
- Assets owned prior to 1 July 2027 and sold on or after that date will be treated under
- current arrangements on gains made prior to 1 July 2027, and
- the new arrangements for gains made on or after 1 July 2027 (with no impact until gains are realised).
This means:
- indexation and the minimum tax will be used to calculate the CGT on gains accruing on or after 1 July 2027 (using the asset’s value at 1 July 2027 as the asset’s cost base)
- the 50% CGT discount will apply to the difference between the asset’s cost base and its value immediately before 1 July 2027.
However, you can choose to continue to apply the current arrangements and the 50% CGT discount for assets owned on, or purchased on or after, 1 July 2027 that are either:
- new residential dwellings, or
- used to provide affordable housing.
Assets purchased before 20 September 1985 will continue to be exempt for gains accrued before 1 July 2027. The new arrangements will then apply to any gains accrued on or after 1 July 2027.
Calculating your capital gain
Transitional arrangements may apply to a CGT asset that you hold on 1 July 2027 and acquired before that date. The law will apply as if you have disposed of the asset immediately before 1 July 2027 and reacquired it on 1 July 2027.
In this case:
- In calculating your gain or loss, you may need to determine the market value of your CGT asset immediately before 1 July 2027.
- You may also have the choice to not determine the market value of your CGT asset but use an alternative method to determine the value of your asset immediately before 1 July 2027. This is known as the 'apportionment method'.
- Any gain or loss is deferred. You only need to report it when you later dispose of the asset or another CGT event occurs in respect of that asset.
Government is currently developing the apportionment method, and we will provide further guidance on using this method once it has been enacted.
See how gains are treated from the date you acquired the asset.
|
When you acquired the asset |
Tax treatment of gains accrued up to 1 July 2027 |
Tax treatment of gains accrued on or after 1 July 2027 |
|---|---|---|
|
Before 20 September 1985 (pre-CGT assets) |
Capital gains remain subject to the CGT exemptions for pre-CGT assets. |
Capital gains accruing from 1 July 2027 will be subject to CGT. Cost base indexation may be used to calculate gains accruing from this date. |
|
On or after 20 September 1985 and before 11:45 am (by legal time in the ACT) on 21 September 1999 |
You can only apply the 50% CGT discount to capital gains. |
Capital gains accruing from 1 July 2027 will be subject to CGT. Cost base indexation may be used to calculate gains accruing from this date. |
|
On or after 21 September 1999 and before 1 July 2027 |
You are generally eligible for the 50% CGT discount on capital gains made on assets held for at least 12 months. |
Capital gains accruing from 1 July 2027 will be subject to CGT. Cost base indexation will apply to eligible assets that meet the 12-month ownership requirement. |
|
On or after 1 July 2027 |
n/a |
All gains accrued will be subject to the new CGT rules. Cost base indexation will apply to eligible assets that are held for more than 12 months to determine the capital gain. |
Cost base indexation
Cost base indexation adjusts an asset's purchase price for inflation using the consumer price index (CPI) before calculating the capital gain.
12-month ownership requirement
For an asset to qualify for the CGT discount or cost base indexation, you must own it for at least 12 months before the CGT event happens. For assets where the transitional arrangements apply and you need to calculate separate gains, if you purchase an asset less than 12 months prior to 1 July 2027 but you hold the asset for at least 12 months before disposing of it you can apply:
- the CGT discount to your pre-1 July 2027 gain, and
- cost base indexation to your post-1 July 2027 gain.
Valuing your asset
Generally, you don't need to know the market value of your asset immediately before 1 July 2027 to complete your tax return for the 2026–27 income year.
For most CGT assets, including real estate, when you dispose of the asset, or another CGT event occurs to that asset, you will need to establish what the market value of the asset was immediately before 1 July 2027.
For most individuals and trustees, the earliest time that you will need to include a capital gain using this method in your tax return will be on or after 1 July 2028, when lodging a return for the 2027–28 income year. You will only need to include this in your return for the 2027-28 income year if you dispose of a CGT asset, or another CGT event happens to it, in that income year.
Note: We will provide additional guidance before the start date on how you can comply with your market value obligations, including:
- how you may determine the market value for certain types of CGT assets
- types of professionals you may want to engage in seeking a valuation
- documentation and records that you need to keep when determining market value.
Keeping records
If you already hold a CGT asset or acquire a new CGT asset before 1 July 2027, you must continue to meet existing record-keeping requirements for the asset. This includes details of:
- when you acquired the asset
- value of the asset at the time you acquired it
- amount you paid to acquire the asset
- any changes to the character or ownership of the asset during the time you have held the asset.
There has been no change to when you must include details about a capital gains event in your tax return. You do not need to include any information in your 2026-27 or 2027-28 tax return unless you dispose of the asset, or another CGT event happens to it, during one of those income years.