$50k, $100k and $500k gains before and after the 2027 reset

A gain of $50,000 does not have one fixed tax bill. The acquisition and disposal dates, cost base, market value just before 1 July 2027, capital losses and the owner's other taxable income can all change the result. The examples below show the moving parts separately. They illustrate the enacted Treasury Laws Amendment (Tax Reform No. 1) Act 2026, whose relevant CGT changes apply to realisations from 1 July 2027, rather than predicting an asset's future price. See the reform overview for the other measures.

The “before” column in each example is a different, hypothetical sale on 30 June 2027 at the stated final price. The “after” column assumes that the same asset remained held and was sold on 30 June 2028 at that price. The two price histories cannot both happen to one holding. Their tax difference is therefore an illustration of the rules, not an available saving or a reason to transact.

What the law does at the reset

A deemed sale is not a real trade or an immediate tax bill

For a qualifying Australian-resident individual's asset held across the transition, section 112-155 deems a disposal just before 1 July 2027 and a reacquisition immediately afterwards. The deemed proceeds and new acquisition amount are normally the asset's market value just before 1 July 2027. The Act also permits a choice to use an apportioning method determined under section 112-185, if one applies. These examples use market value, not that alternative. The Explanatory Memorandum, paragraphs 1.109–1.114 explains the two components.

Under section 112-160, the notional gain or loss is disregarded at the reset and reappears in the income year of a later realisation event. A deferred gain can retain the old 50% discount where the actual holding period qualifies. The later gain starts from the reset cost base and generally uses eligible cost-base indexation instead of that discount. The deemed sale does not require the owner to sell anything.

The 30% rule is a possible top-up

The Act's Division 119 compares 30% of the defined minimum tax capital gain with the basic income tax attributable to that gain. If that basic tax, before offsets, is lower, an eligible individual pays the positive gap, rounded down to whole dollars. It is not a flat 30% charge on sale proceeds, the entire historic gain or the already-discounted pre-reset component. The Explanatory Memorandum's minimum-tax explanation sets out the comparison.

The top-up is confined to an individual who was an Australian resident at some time in the income year and has a positive gap. Section 119-15 excludes anyone who receives a listed payment during the year, including the Age Pension, JobSeeker, family tax benefit and parental leave pay. The defined gain can also be reduced by eligible deductible gifts and conservation-covenant deductions. None of these examples includes such a payment or deduction. Ordinary income tax on a gain can still be payable when the top-up is excluded. Trusts and partnerships do not themselves pay this individual top-up; attribution to an individual may need a separate calculation.

Assumptions behind the examples

Every asset below is an ordinary investment asset acquired by an Australian-resident individual on 1 January 2024 with a $100,000 cost base. The owner remains resident and is never a foreign or temporary resident during the period relevant to indexation. There are no transaction costs, other gains, carried-in losses, small-business concessions, new-residential-dwelling or affordable-housing concessions, deductible gifts or income-support payments unless an example says otherwise. Other taxable income is held fixed within each example, but differs between examples.

For a sale on 30 June 2028, the reform engine is given illustrative index numbers of 100 for the reset expenditure quarter and 105 for the disposal quarter. The resulting hypothetical 5% change is an arithmetic input, not a published future CPI result or an investment return. Actual indexation would require the published indices for the relevant quarters, subject to the Act's indexation conditions. The examples use the site's 2026–27 and 2027–28 income-tax settings respectively. They show income tax attributable to the illustrated gain, before any Medicare levy effect, and do not model offsets outside the engine's tax calculation or a change in the time when tax is paid. Section 960-275 specifies the indexation calculation.

The final row has the same $50,000 overall price rise as the first, but the value at reset is below cost. It tests the treatment of a deferred loss rather than assuming every pre-reset portion is a gain.

Four worked examples

$50,000 gain: lower other income and a possible top-up

An individual with $30,000 other taxable income acquired the asset for $100,000. The hypothetical final proceeds are $150,000 and its value just before the reset is $125,000. That splits the raw rise into $25,000 before and $25,000 after the reset. If sold on 30 June 2027, the old-law taxable gain is $25,000 and income tax attributable to it is $5,775.

If instead held to 30 June 2028 under the alternative price history, the deferred portion is discounted and the later portion uses the indexed reset cost base. The reform engine produces $31,250 taxable gain, $7,593.75 ordinary income tax on that gain and a minimum-tax top-up of $400, making $7,993.75 total modelled tax. The later scenario is $2,218.75 higher than the earlier scenario under these particular assumptions. At this income, the ordinary-tax difference also reflects the low income tax offset taper under section 61-115, not just the tax brackets. The floor can matter even though only the post-reset component enters its test.

$100,000 gain: middle income and a different split

An individual with $90,000 other taxable income bought for $100,000. Final proceeds are $200,000 and the reset value is $160,000. The raw components are $60,000 before and $40,000 after the reset. A hypothetical 30 June 2027 disposal produces $50,000 taxable gain and $15,350 income tax attributable to it.

On the alternative 30 June 2028 sale, the deferred component retains the applicable old-law discount. The reset cost base is indexed using the stated illustrative indices before the later gain is worked out. The result is $62,000 taxable gain, $19,790 ordinary tax, $0 top-up and $19,790 total modelled tax, $4,440 above the earlier scenario. A single marginal-rate multiplication would miss bracket crossings; both scenarios run a complete tax calculation.

$500,000 gain: higher other income

An individual with $190,000 other taxable income bought for $100,000. The hypothetical sale proceeds are $600,000, with the asset valued at $400,000 just before the reset. The raw components are $300,000 before and $200,000 after. An earlier hypothetical sale yields $250,000 taxable gain and $112,500 tax attributable to it.

The later hypothetical sale yields $330,000 taxable gain, $148,500 ordinary tax, $0 top-up and $148,500 total modelled tax, $36,000 above the earlier scenario. The higher other income can cause marginal tax attributable to the post-reset component to exceed the statutory floor, leaving no top-up. The example also shows why the same raw gain does not imply the same taxable gain.

$50,000 overall rise with a loss at reset

An individual with $60,000 other taxable income bought for $100,000. The asset is worth only $90,000 just before 1 July 2027, then is assumed sold for $150,000 on 30 June 2028. The first component is a $10,000 deferred loss, while the later raw increase is $60,000. A separate hypothetical sale for $150,000 on 30 June 2027 would instead produce $25,000 taxable gain and $7,600 income tax attributable to it.

Under the later history, section 112-160(4) and the amended section 102-5 ordering bring the deferred loss into the actual sale year and apply losses before any discount. The later result is $45,500 taxable gain, $13,750 ordinary tax, $0 top-up and $13,750 total modelled tax, $6,150 above the earlier scenario. The fact that the asset ends above its original cost does not erase the interim deferred loss.

Results at a glance

These are tax amounts attributable to the asset's gain, not total personal tax.

The figures come from separate runs of the site's capital gains calculator and 2027 CGT reform calculator, with the reform comparison adapter cross-checking the later result. For the detailed inflation calculation, see indexation versus the discount.

Facts that would change an actual calculation

Reset value, losses and parcel records

The market value just before 1 July 2027 becomes the deemed proceeds and the later cost base; a valuation is the evidence of it. It is not necessarily the owner's purchase price, a value observed on the eventual sale date or an automatic cash receipt. The ATO's CGT records guidance calls for acquisition, cost, disposal and valuation records. The ATO's valuation guide says the method, inputs and supporting evidence should make a valuation replicable and defensible; engaging a professional does not transfer that responsibility away from the taxpayer. Different acquisition parcels may have different cost bases and holding periods. An external capital loss can change the statutory netting before the discount, so the result must be recalculated for the full facts. The shares and ETFs article discusses parcel records.

Residency, concessions and the taxable-income setting

The examples deliberately exclude foreign or temporary residency, assets acquired before 20 September 1985 and the surviving discounts for certain new residential dwellings and affordable housing. These have separate statutory branches; the automatic reset article and pre-1985 asset article explain the distinctions. The minimum-tax test also depends on the person's full-year facts, including any specified payment under section 119-15 and relevant deductions. Changing other taxable income can change the amount of ordinary tax on the same taxable capital gain. The site's tool accepts those inputs rather than assuming that every investor pays one rate.

A real sale followed by a repurchase

The statutory deemed reacquisition is separate from a person actually selling an asset and buying the same or a substantially identical asset back. ATO Taxpayer Alert TA 2008/7 and Taxation Ruling TR 2008/1 address loss-generating arrangements that preserve economic exposure: depending on the facts, Part IVA may cancel the capital-loss benefit. Those documents focus on losses or deductions; how Part IVA applies to a sale at a gain followed by a repurchase depends on the facts. None of these examples assumes a repurchase, and they do not suggest a sale, date or strategy. See the selling-date explainer for the factual questions involved.