Australia’s 2027 CGT Change Explained

For more than two decades, the 50% CGT discount has been one of the most valuable features of Australian investment tax. From 1 July 2027, a proposed reform would change how capital gains are taxed for individuals. This guide walks through what is changing, when, and why it matters — and you can run the numbers for your own asset with our CGT Change Calculator.

The rules today: the 50% CGT discount

Under current law, if you hold a capital asset — property, shares or crypto — for more than 12 months, only half of your nominal capital gain is added to your assessable income. That gain is then taxed at your marginal rate. This is the CGT discount that has applied since September 1999, and it is confirmed in the ATO's CGT discount guidance.

What changes from 1 July 2027

The proposed 2027 CGT change replaces the flat 50% discount with two mechanisms working together:

• CPI indexation of the cost base. Instead of halving the gain, your original purchase cost is adjusted upward for inflation over the time you held the asset. Only the real gain — the increase above inflation — is taxed. For fast-growing assets this can be less generous than the old discount; for slow-growing assets held a long time, indexation can sometimes be more favourable.
• A 30% minimum effective rate. Even if your marginal rate on the indexed gain would be lower than 30%, you still pay at least 30% on the real gain. This floor is the part of the reform that changes the maths most for lower-income investors and retirees.

The three transitional buckets

Because assets are often bought under one regime and sold under another, the reform uses transitional rules. Our calculator sorts every asset into one of three buckets based on your purchase and sale dates:

• Bucket A — old rules. Sold before 1 July 2027. The full 50% discount still applies; the reform does not touch these sales.
• Bucket B — transitional split. Bought before, sold after 1 July 2027. The gain is split proportionally by days held before and after the transition date. The pre-2027 slice keeps the 50% discount; the post-2027 slice uses indexation and the 30% floor.
• Bucket C — new rules. Bought from 1 July 2027 onwards. The new rules apply in full.

Who is most affected

Higher-income investors already pay a marginal rate above 30%, so the 30% floor changes little for them; the shift from discount to indexation is what matters. The bigger impact tends to fall on lower-income earners and retirees who previously combined the 50% discount with a low marginal rate — the new 30% minimum can raise their bill noticeably. Investors in shares and managed funds will also need accurate purchase records for every parcel, since indexation depends on precise dates and prices.

What about my home?

The main residence CGT exemption is unaffected by the 2027 change. These rules — and our calculator — are aimed at investment assets, not the home you live in.

See it for your own asset

The fastest way to understand the change is to enter your own figures. The CGT Change Calculator works out your bucket automatically and shows the estimated difference between the old and new rules side by side. If you also own a rental property, the Negative Gearing Calculator covers the separate 2026 reform.