From 1 July 2027, the way many Australians work out capital gains tax will change. The 50% CGT discount for individuals, trusts and partnerships will be replaced, for gains that accrue from that date, with cost base indexation and a 30% minimum tax on the real gain. Gains you have already made by 30 June 2027 can still get the 50% discount, if you were entitled to it.

These changes are law. They were enacted in the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and they apply to CGT assets generally, including shares and property, when the asset is held by an individual, partnership or trust for at least 12 months. Crypto held as an investment is generally a CGT asset under existing ATO guidance, so the same settings are the ones to plan for unless official guidance later says otherwise.

The Never Lose Interest CGT calculator explainer covers how a gain is worked out under the current rules, including official cost base examples for shares and property. This page compares those current settings with the rules that apply to gains accruing from 1 July 2027, using official Treasury worked examples, and explains the deemed sale that splits a gain already accrued by that date. For the broader reform, including negative gearing, see the main 2027 guide.

This is general information only. It is not personal advice or tax advice, and it does not take into account your objectives, financial situation or needs. Consider speaking with a registered tax agent before you sell an asset or lodge a return that includes a capital gain.

How does the 50% CGT discount work now?

Under the current rules, if you are an individual, a trust or a partnership, and you hold a CGT asset for at least 12 months, you can generally reduce a capital gain by 50% before it is added to your taxable income. You first subtract any capital losses, then apply the discount to the remaining discountable gain. The result is included in your taxable income and taxed at your marginal rates, plus any Medicare levy that applies.

A short example helps. You buy shares for $20,000 and sell them 18 months later for $30,000. Ignoring incidental costs, the capital gain is $10,000. After the 50% discount, $5,000 is taxable. If your marginal rate (excluding the Medicare levy) is 30%, the tax on that gain is $1,500. If you had sold inside 12 months, the discount would not apply and the full $10,000 would be taxable.

Companies do not get the 50% discount. Superannuation funds have their own CGT rules. The discount also does not apply to assets acquired before 20 September 1985, which are generally pre-CGT assets, or to a gain that is disregarded under another rule, such as the main residence exemption for your home.

What replaces the discount from 1 July 2027?

Two settings replace the flat 50% discount for gains that accrue from 1 July 2027.

Cost base indexation

The cost base of the asset is increased for inflation, using the Consumer Price Index (CPI), in a way the Budget explainer says is similar to the arrangements that applied between 1985 and 1999. You are then taxed on the real gain, meaning the rise in value after inflation, not the whole nominal gain. The ATO has said it will provide guidance and tools to support the calculation.

Indexation can leave you better or worse off than a flat 50% discount, depending on the return and inflation over the period you held the asset after 1 July 2027. If the asset only keeps pace with CPI, the taxable gain under indexation can be nil, or close to it. If the asset rises well above inflation, a larger share of the nominal gain remains taxable than under a 50% discount.

The Budget explainer gives official cameos, assuming 2.5% inflation, an asset purchased for $500,000 in July 2027, a 10-year holding period, and $100,000 of other income a year:

  • At a 5% annual return, similar to longer-term residential property returns in that explainer, the taxable gain is $174,405 under indexation, compared with $157,224 under a 50% discount. Extra tax in that cameo is $8,075.
  • At a 2.5% annual return, equal to the assumed inflation rate, there is no taxable gain under indexation. Under a 50% discount the taxable gain would have been $70,021, and the explainer says the taxpayer pays $24,858 less tax.
  • At a 7.5% annual return, the taxable gain is $390,474 under indexation, compared with $265,258 under a 50% discount. Extra tax in that cameo is $58,851.

These are Treasury illustrations, not a prediction of your result. Your figures will depend on actual CPI, your actual cost base and proceeds, and your other income in the year you sell. Do not interpolate from these cameos and treat the result as exact.

The 30% minimum tax

A minimum tax rate of 30% applies to real capital gains accruing from 1 July 2027. It has no effect until the gain is realised. It does not increase the tax for people whose capital gains are already taxed at 30% or more.

It does affect people who would otherwise pay a lower rate on the gain. The Budget explainer uses Jack as an example. In 2029-30 he has $25,000 of taxable income before capital gains and realises a $10,000 capital gain on an asset he bought in 2027-28. Tax on that gain at ordinary rates (excluding the Medicare levy) would be $1,400, or 14%. Because that is below 30%, he pays an extra $1,600 to bring the tax on the gain up to 30%. Offsets may be available to reduce the minimum tax.

You are exempt from the minimum tax if you received a means-tested income support payment, such as the Age Pension or JobSeeker, in the financial year you realise the gain.

What happens to gains I have already made?

The new rules apply to gains that accrue from 1 July 2027. Gains that accrued before that date keep access to the 50% discount, if you were otherwise entitled to it. An asset you already hold on 1 July 2027 will usually produce a gain in two parts when you later sell it.

The Act does this with a deemed sale and reacquisition. In broad terms, you are taken to have sold the asset just before 1 July 2027 (on 30 June 2027) and to have acquired it again on 1 July 2027 for the same amount. The capital proceeds for that deemed sale are the asset's market value just before 1 July 2027, unless you choose a later apportioning method determined under the law. Any gain or loss on the deemed sale is deferred until you actually dispose of the asset. You do not have to make the choice, or finish the calculation, until you lodge the tax return for the year of the real sale.

The Budget explainer works through this with Jane. She buys an asset on 1 July 2022 for $800,000 and sells it on 1 July 2032 for $1,600,000. Using ATO tools, she determines the asset was worth $1,131,371 at 1 July 2027. Her taxable gain is in two parts:

  • $165,685 from before commencement, being the $331,371 gross gain with the 50% discount
  • $319,958 from after commencement, being the $468,629 later gain less cost base indexation

Her total taxable capital gain is $485,643, compared with $400,000 if a 50% discount had applied to the whole gain. At a 47% tax rate, the explainer puts the tax at $228,252, compared with $188,000 under a full 50% discount.

For assets without a readily ascertainable market value, the Government has consulted on a draft method for apportioning gains and losses. That method should be confirmed in official ATO or Treasury materials before you rely on it. Listed shares and many widely traded crypto assets will usually have a market value that can be evidenced. Real property will often need a valuation.

How do the rules apply to shares, property and crypto?

The method is the same for each, with a few practical differences.

Shares. Listed Australian shares are CGT assets. Dividends are income, not a capital gain, and franking credits are a separate calculation. When you sell or otherwise dispose of a parcel, you need the cost base and the acquisition date for that parcel. The 12-month holding period is tested against the parcel you disposed of. From 1 July 2027, a share parcel you already hold will have its pre-commencement gain discounted, if you were entitled to the discount, and its later gain indexed. A parcel you buy on or after 1 July 2027 will be under the new rules for the whole period you hold it, once you have held it for 12 months.

Investment property. The same CGT split applies. Grandfathering for negative gearing does not lock in the 50% discount for later gains. Eligible new builds are the main exception: you can choose the 50% discount or the new rules when you sell, if the dwelling is a new residential dwelling in relation to you. That definition was still being completed as at November 2026. See the new builds versus established property guide. Your home can still be covered by the main residence CGT exemption, which is a different rule from the discount.

Crypto. If you hold crypto as an investment, the ATO treats it as a CGT asset. A sale, swap, gift or spend is a disposal. A transfer between wallets you own is generally not, apart from any network fee. Staking rewards and some airdrops can also be ordinary income when received, with a separate CGT event when those tokens are later disposed of. The 2027 settings should be planned for on gains that accrue from 1 July 2027, unless the ATO later publishes a specific exception. Parcel records matter here, because the 12-month test and the 1 July 2027 split both depend on identifying what you disposed of. See the Never Lose Interest crypto tax guide.

In each case, capital losses can still reduce capital gains. A net capital loss cannot be deducted against salary. It can be carried forward.

When can I still use the 50% discount after 1 July 2027?

You can still use it for:

  • the part of a gain that accrued before 1 July 2027, if you were entitled to the discount
  • an eligible new residential dwelling, if you choose the discount rather than indexation
  • affordable housing, where the specific CGT rule in the Act applies
  • a sale before 1 July 2027, which is still under the current law in full

You generally cannot use it for the part of a gain that accrues from 1 July 2027 on shares, established property, crypto or other CGT assets, once the new rules apply. Assets sold inside 12 months are generally taxed on the full gain under current law, and you should not assume a new concession will apply to short-term trades.

Should I sell before 1 July 2027?

There is no general answer. Selling before the start date can keep the 50% discount on the whole gain, if you are entitled to it. It also crystallises the tax in 2026-27, brings forward selling costs, and, for property, may mean any replacement established dwelling is not grandfathered for negative gearing.

Holding the asset defers the tax and preserves any further growth, but the later gain will be taxed under indexation and, where it applies, the 30% minimum tax. For some lower-return assets, indexation can produce a lower tax bill than the discount, as in Treasury's 2.5% return cameo. For higher-return assets, the bill can be larger.

Use the Never Lose Interest CGT calculator to compare the two settings on your own numbers, then have a tax agent check the result against the law in the year you act. Keep records of market value around 30 June 2027, even if you have no plan to sell soon.

Frequently asked questions

Do the new CGT rules apply if I sell in July 2027 an asset I have held for years?

Yes, in part. The gain that accrued up to just before 1 July 2027 can still get the 50% discount, if you were entitled to it. The gain that accrues from 1 July 2027 is generally taxed under the new rules. Even a sale in early July 2027 can have a (usually small) post-commencement component.

Does the 30% minimum tax apply to someone already on the 45% rate?

No. The Budget explainer says the minimum tax will not affect people whose capital gains are already taxed at rates of at least 30%. It is aimed at gains that would otherwise be taxed at a lower marginal rate.

I am on the Age Pension. Do I pay the minimum tax if I sell shares?

The Budget explainer says recipients of means-tested income support payments, such as the Age Pension or JobSeeker, are exempted from the minimum tax if they receive any payment in the financial year in which they realise the capital gain. Ordinary tax on the gain can still apply.

Are inherited assets or pre-CGT assets affected?

Assets acquired before 20 September 1985 are generally still pre-CGT assets under the current law. Inherited assets have special cost base and main residence rules. Later legislation has also been flagged for some trust and deceased estate interactions with the minimum tax. Get advice before you assume the standard split applies.

Will indexation apply if I have only held the asset for a few months?

The Budget explainer describes the indexation changes as applying to CGT assets held by individuals, partnerships and trusts for at least 12 months. A short-term disposal is generally taxed on the full gain under the current rules. Do not assume indexation will reduce a gain on an asset held for less than 12 months.

General information warning

This article, and the Never Lose Interest CGT calculator, are general information only. They are not tax advice or personal financial product advice, and they do not take into account your objectives, financial situation or needs. Some implementation details, including the method for valuing certain assets at 1 July 2027 and the final new-build CGT choice, were still being completed when this page was reviewed. Consider seeking advice from a registered tax agent before you sell or lodge.

Sources

Last reviewed: November 2026.