The 50% CGT Discount Is Ending: What the 2027 Changes Mean for Your Shares, Property and Business

The biggest change to capital gains tax since 1999 is now legislated. From 1 July 2027, the 50% CGT discount for individuals, trusts and partnerships disappears, replaced by cost-base indexation and a 30% minimum tax rate on capital gains. Unlike the negative gearing reforms it travelled with, this one isn't just about property — it applies to every CGT asset you hold personally or in a trust: shares, ETFs, crypto, investment property, business goodwill.

Here's how the new system works and the decisions worth making before the changeover.

The new system in three parts

• Indexation replaces the discount. Instead of halving your gain after a 12-month hold, your cost base is indexed for inflation (CPI) — similar to the pre-1999 method. You're taxed on your real gain, not the nominal one.

• A 30% minimum tax rate applies to net capital gains from 1 July 2027.

• Capital losses are not indexed — nominal losses offset indexed gains, an asymmetry that matters for loss-harvesting strategies.

  
  

Who's in and who's out

Affected: Australian resident individuals, trusts and partnerships.

Not affected:

• Your home — the main residence exemption is untouched.

• Superannuation funds — including SMSFs, which keep the one-third discount. This quietly makes super an even more attractive place to hold growth assets.

• Companies — no change to company CGT treatment.

• Foreign and temporary residents — existing treatment continues.

• Income support recipients (e.g. Age Pension) — exempt from the 30% minimum tax.

• New residential dwellings and affordable housing — owners can choose between keeping the 50% discount or applying indexation.

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The transition: gains are split at 1 July 2027

The reforms apply to gains accruing after 1 July 2027. Gains built up before that date are dealt with under the current rules through transitional arrangements — effectively splitting your gain at the changeover. Two important wrinkles:

• Pre-CGT assets lose their blanket exemption. Assets acquired before 1985 remain exempt only for growth up to 1 July 2027; growth after that date is taxable under the new rules. If you or your parents hold long-forgotten pre-1985 shares or land, this is the year they re-enter the tax system.

• The split creates a genuine valuation and record-keeping exercise. Establishing values at 30 June 2027 for significant assets will matter for decades.

  
  

Winners, losers and the maths

Whether indexation beats the 50% discount depends on how your asset's growth compares to inflation. Slow-growth assets in high-inflation periods can actually do better under indexation — much of the gain is inflation and gets carved out. High-real-growth assets (a share that triples in three years) do materially worse, because indexation shields only the CPI component and the rest is taxed at a minimum of 30%. In broad strokes: long-held, modest-growth assets fare fine; fast compounders held personally lose the most.

Related changes worth knowing

• Small business owners got a win: the turnover threshold for the 50% active asset CGT concession rises from $2 million to $10 million — significant if you're planning a business sale.

• A new Innovative Business CGT Concession for founders, employee share scheme participants and early-stage investors is under consultation, responding to concerns about low-cost-base founder equity.

• These reforms interact directly with the negative gearing changes for property investors — see our companion guide.

  
  

Decisions to consider before 1 July 2027

• Realisation timing. Assets with large accrued gains keep the 50% discount treatment on pre-changeover growth, but for some holdings, crystallising before 1 July 2027 may be preferable to carrying complexity forward. This is a case-by-case calculation — not a blanket "sell everything" call, and transaction costs and market risk cut against tax-driven selling.

• Asset location. With super retaining its discount and companies unchanged, where you hold future growth assets — personally, in trust, in super, in a company — matters more than it has in a generation. Contribution caps and access rules still constrain the super route.

• Trust distributions. Trusts are inside the new rules; the mechanics of streaming capital gains through trusts to different beneficiary types get more complex, not less.

• Records. Start assembling cost base evidence and 30 June 2027 valuations for significant assets now.

  
  

Model it before you move

The right response to these changes is arithmetic, not instinct. Niloc & Co runs before/after comparisons for share portfolios, investment properties and business exits under the old and new CGT rules, so you can see the actual dollars before deciding to hold, sell or restructure.

Book a CGT planning session online or explore our tax planning services. Call 0455 355 967.

Frequently asked questions

Does the CGT change apply to shares or just property?

All CGT assets held by individuals, trusts and partnerships — shares, ETFs, crypto, property, collectables, business assets. It is much broader than the housing measures it was announced alongside.

Is my family home affected?

No. The main residence exemption is unchanged.

Should I sell before 1 July 2027?

Not automatically. Pre-changeover gains keep current treatment under the transitional rules, and selling triggers tax now plus transaction costs. For some asset and inflation profiles, indexation is comparable or better. Model your specific holdings before acting.

This article is general information only and does not take into account your circumstances. It is not tax, legal or financial advice. Speak to a registered tax agent before acting.