The short answer is: it depends on what you own, how long you plan to hold it, and what return you expect to make.
Here is how to work out where you stand, and what you should do.
If You Already Own Assets Bought Before 12 May 2026
Your Existing Holdings Are Mostly Protected
Gains you have already built up before 1 July 2027 are still calculated under the current 50% discount method. Only gains that accrue after 1 July 2027 are subject to the new indexation and minimum tax rules.
So if you bought a property in Brisbane in 2019 and plan to sell in 2030, the gain from 2019 to 30 June 2027 is still discounted at 50%. Only the gain from 1 July 2027 to the sale date gets the new treatment.
This split-at-the-boundary approach is important to understand. The reform is not retrospective. It does not wipe out gains you have already made.
But the Exit Calculation Changes for Long Holders
Here is where the strategy question becomes real. If you are a long-term holder with a large unrealised gain, the post-2027 portion of that gain will face a different and potentially higher effective tax rate than you have planned for.
The Treasury’s own modelling puts numbers to this. An asset bought in 2022 for $800,000, sold in 2032 for $1,600,000 at a 7.2% annual return, results in $40,252 more tax under the new transitional rules than under a straight 50% discount. That gap exists purely because the post-2027 gain is large relative to what CPI indexation removes.
If your investment thesis involves holding for 10 or 15 more years and you expect strong real returns, the arithmetic has changed meaningfully. Running the numbers before you commit to a long hold is now worth doing.
If You Are Buying an Established Property After Budget Night
This Is Where Strategy Shifts the Most
Investors buying established residential properties after 7:30pm AEST on 12 May 2026 face the new CGT treatment on gains from 1 July 2027, and a ring-fencing of negative gearing losses from 1 July 2027 onwards. Those who buy between Budget night and 30 June 2027 can still negatively gear during that window, but the ring-fence applies from 1 July 2027.
On the CGT side specifically, the 50% discount is gone for gains accruing after 1 July 2027. Indexation applies instead. And the 30% minimum tax means you cannot simply time your sale for a low-income year to reduce the effective tax rate.
For established property investors who are buying now with a view to selling in a rising market, the after-tax return on exit is lower than it would have been under the old rules for assets with strong real capital growth.
What Rate of Return Determines Whether You Pay More or Less
This is the calculation most investors are skipping. Whether indexation works in your favour or against you depends entirely on how much your asset grows above inflation.
Based on Treasury analysis using 2.5% annual inflation, a $500,000 asset purchased in July 2027 and held for 10 years with $100,000 in other income:
Investor | Annual Return | Extra Tax vs Old Discount |
Moderate growth (typical residential property) | 5% per year | $8,075 more |
Inflation-matching growth | 2.5% per year | $24,858 less |
Strong real growth | 7.5% per year | $58,851 more |
If your property investment returns around 2.5% or less in nominal terms, indexation actually helps you.
If it returns 5% or above, which is roughly what Australian residential property has averaged over longer periods, you will pay more tax at sale than you would have under the old rules.
If You Are Investing in New Builds
You Retain Full Flexibility
Investors in eligible new residential builds retain access to both the 50% CGT discount and the new indexation arrangement. You choose which to apply when you sell.
This means you can run the comparison at sale time and pick the better outcome. That choice is valuable when returns are strong, since the 50% discount often produces a lower taxable gain in those scenarios.
New builds also keep full negative gearing access, meaning rental losses can still offset wage income. That combination makes the new build pathway considerably more attractive from a tax perspective than buying established property, for investors who are starting fresh after Budget night.
But the definition of an eligible new build matters. A duplex replacing a single free-standing house qualifies. A free-standing house replacing a smaller existing free-standing house does not. A new apartment bought off-the-plan qualifies. A property extended with extra bedrooms does not. Getting this wrong at acquisition means losing both the CGT choice and the negative gearing access.
If You Hold Shares or Non-Property Assets
The CGT Changes Apply Here Too
One thing that often gets lost in the property-focused coverage of these reforms is that the CGT changes apply across all asset classes held for more than 12 months by individuals, partnerships and most trusts. That includes Australian and international shares, managed funds, and other CGT assets.
The 50% discount is going for shares too, not just property. Cost base indexation based on CPI replaces it from 1 July 2027.
For shares that are held for the long term, the same dynamic applies: moderate real returns might produce a similar or lower tax outcome under indexation, while strong real returns will produce a higher tax bill than under the old discount.
This is worth thinking about for investors who hold concentrated share positions in individual companies or sectors that have delivered strong real growth. The after-tax return on an eventual sale of those positions changes under the new rules.
Note that the negative gearing changes do not apply to shares or other non-residential assets. Only the CGT treatment changes for those asset classes.
The Minimum Tax and What It Closes Off
The Retirement Sale Strategy No Longer Works the Same Way
A common planning approach for Australian investors with large capital gains has been to time asset sales for retirement, when income is lower, to reduce the effective CGT rate. Under the old 50% discount combined with a low marginal rate in a low-income year, effective rates on nominal gains could fall well below 15%.
The 30% minimum tax on real capital gains closes that off for assets acquired after 1 July 2027. Even if your other income in the year of sale is minimal, you still pay at least 30% on the real capital gain.
If you receive an income support payment (the Age Pension, JobSeeker, or similar) in the financial year you realise the gain, you are exempt from the minimum tax. So for investors who are already on income support at the time of sale, the minimum tax does not apply.
But for investors planning to retire before Age Pension age and sell assets during a lower-income period, the minimum tax will apply. That is a genuine change to the planning picture.
Note: The measures described in this article were announced in the 2026-27 Federal Budget but are not yet law. They are subject to parliamentary approval and may change before enactment. This article reflects the proposals as announced.
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