On 26 June 2026 the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49, 2026) received Royal Assent. From 1 July 2027 it makes the two largest changes to personal capital gains tax in a generation. Neither is complicated once you see the mechanics — here's what actually changes, without the noise.
Change one: the 50% CGT discount is replaced, not just reduced
Today, if you hold an asset (shares, an investment property, a managed fund) for more than 12 months before selling, only half your capital gain is taxable. From 1 July 2027 that discount goes for individuals and for trusts other than complying superannuation entities.
It is replaced with two mechanisms working together:
- CPI cost-base indexation. Your cost base — what you paid, plus buying costs — is adjusted upward for inflation between when you incurred the cost and when you sell. This is the same idea Australia used before the 50% discount existed in 1999, just brought back. It is not automatic: section 114-10(1) indexes only where you "had acquired the asset at least 12 months before the time of the CGT event", so a parcel sold inside twelve months of acquiring it gets neither the discount nor indexation.
- A 30% minimum tax on the gain. This is not a flat 30% rate. It is a top-up that only bites if your marginal-rate tax on the gain would otherwise come in under 30% of it. If your marginal rate already taxes the gain at 30% or more, the top-up is nil.
Companies and complying super funds are out of scope — this affects individuals and trusts other than complying superannuation entities (not partnerships — a partnership makes no discount capital gain of its own). New residential dwellings and affordable housing are treated differently again: a discount of at least 50% continues to apply to them by default, and indexation is the alternative you can choose instead. For affordable housing that choice is only open where the discount would otherwise be 60%. Because that discount still applies, those assets also sit outside the cost-base reset (section 112-155(1)(e)) and their gains stay out of the 30% minimum tax base (section 119-5(2)(b) and (c)).
Change two: negative gearing is quarantined for some purchases
If you contract to buy an established residential dwelling at or after 7:30pm AEST on 12 May 2026, net rental losses on it can only offset residential rental income or residential capital gains from the 2027-28 income year (which starts on 1 July 2027 for most people) — not your salary.
Two carve-outs matter:
- Anything you contracted before that cutoff keeps full negative gearing indefinitely, regardless of when you settle.
- New residential dwellings are grandfathered too, whenever you bought them. What legally counts as "new" is not yet defined — that's delegated to a Ministerial legislative instrument that had not been made as of this article's last check.
What happens to something you already own
Neither change works by simply flicking a switch on 1 July 2027. For CGT, the Act treats most assets you hold as sold at market value just before 1 July 2027, and bought back at that value just after — a deemed disposal and reacquisition, not a pro-rata blend. The portion of the gain up to that point keeps the current 50% discount rules; the portion after it is where indexation and the 30% minimum tax apply.
Who is exempt from the 30% minimum tax
Recipients of several income-support payments — the Age Pension, JobSeeker, Carer Payment, several DVA pensions, Family Tax Benefit and others — are exempt from the minimum tax top-up for any income year they receive a qualifying payment. Ordinary marginal-rate tax on the gain still applies as usual; only the top-up is waived.
Two limits sit alongside that, and they work differently. The charge itself only reaches someone who was "an Australian resident at any time during the income year" (section 119-10(1)(b)). And separately, some gains never enter the calculation at all rather than some people being excused: a gain that section 115-102 or section 115-125 applies to — a new residential dwelling, or affordable housing — is left out of the minimum tax base by section 119-5(2)(b) and (c).
See your own numbers
This article is the overview. For your specific position:
- The CGT Calculator 2027 New Rules shows your gain under today's discount and under the new rules side by side.
- The Am I Grandfathered? Negative Gearing Changes 2027 checker takes your purchase date and dwelling type and gives an instant verdict.
- The 2027 Tax Changes hub has the full mechanic-by-mechanic breakdown with the sourcing behind every figure.
Frequently Asked Questions
Not immediately in cash terms, but it changes the tax treatment of most of what you hold going forward, because of the deemed-disposal apportionment described above. It's worth knowing your position even if you have no plans to sell.
No. Growth up to 1 July 2027 is taxed under the rules that applied at the time. Only growth after that date falls under indexation and the minimum tax.
This article is general information about what the law does, not a recommendation to buy, sell or hold anything. Whether any action makes sense for you depends on your own circumstances — that's a conversation for your accountant, not a blog post.