CGT Rule Changes Coming in 2027: What Investors Must Do
Australia's CGT discount system changes from 1 July 2027 — property investors holding assets across the transition date need to act now.
For most property investors, Capital Gains Tax sits firmly in the "deal with it when I sell" pile. The problem is that a change to Australia's CGT regime taking effect on 1 July 2027 creates preparation work that must happen before a sale — and ideally before the transition date itself.
Property Update reports that from 1 July 2027, the current 50 per cent CGT discount for individuals, trusts and partnerships will be replaced by cost-base indexation, together with a minimum 30 per cent tax rate on real capital gains. The new rules are prospective. Gains accumulated before 1 July 2027 will continue to be treated under the existing arrangements; gains accruing after that date will fall under the new system.
For the roughly three million Australian investment properties currently held, that creates a dividing line within each property's ownership history. And for investors who plan to hold for many more years, getting the numbers right around that date could make a material difference to the eventual tax bill.
Why the transition date matters for record-keeping
The challenge is practical. To correctly apportion gains across the 1 July 2027 boundary, investors will need to establish the market value of their property at that date. That value — or a reliable approximation of it — forms part of the calculation that determines how much of any future capital gain falls under the old rules and how much falls under the new.
Property Update is direct on the point: if a substantial proportion of a property's growth has already occurred before July 2027, having reliable evidence of its value around the transition date may become extremely valuable when the property is eventually sold.
Long-term investors know how documentation disappears. Renovation invoices get misplaced, purchase documents are lost in house moves, memories of what a property looked like and what it cost to maintain become unreliable over time. The ATO already expects property owners to retain cost-base records — purchase documents, stamp duty, legal fees, valuation costs, and records of eligible capital improvements. Some ownership costs may also form part of the cost base where they have not been claimed as tax deductions.
For properties approaching or across the transition date, Property Update suggests investors discuss with their accountant whether obtaining an independent valuation around 1 July 2027 is appropriate for their circumstances. A valuation prepared close to the relevant date can capture factors that may be difficult to reconstruct years later — renovations, property condition at the time, and local market circumstances that influenced value.
How to approach the next twelve months
There are concrete steps investors can take in the lead-up to July 2027.
**Audit your cost-base documentation now.** Gather purchase contracts, settlement statements, stamp duty receipts, legal fee invoices, and records of all capital improvements made since purchase. If records are incomplete, work to fill the gaps while memories and paper trails are still accessible. This is foundational to any future CGT calculation, regardless of which rules apply.
**Consider whether an independent valuation makes sense.** For investors holding properties that have experienced significant capital growth — particularly in the period between 2020 and 2024 — an independent valuation around 1 July 2027 creates a defensible evidence base. Your accountant can advise whether the cost is justified by your individual circumstances.
**Do not let the tax change drive investment decisions.** Property Update's point on this is clear: high-quality properties with strong long-term capital growth prospects may still create considerably more wealth after tax than inferior properties purchased primarily for tax efficiency. A regime change is a reason to plan, not a reason to sell good assets.
**Review your overall portfolio structure.** The interaction between CGT treatment, financing structure, and income position varies considerably across different investor profiles. If you hold multiple investment properties or have a mix of ownership structures, the transition may affect you differently than it affects a single-property holder. A conversation with both your accountant and a mortgage broker is worth having in the next twelve months.
For investors thinking about financing alongside the tax changes, our investor home loan hub has comparisons of current investor loan rates. If you are considering adding to your portfolio before the transition date, use our borrowing power calculator to understand what financing is available at current rates.
The bottom line for property investors
The 1 July 2027 date is not a reason to panic, and it is not a reason to sell good assets. It is a reason to get organised now, while there is still time.
The investors who will be most affected are those who wait until they are already under contract on a sale — or already past the date — before thinking about how their gains are calculated. By then, the opportunity to establish reliable transition-date values and gather complete cost-base records has closed.
As Property Update puts it: investors who plan ahead will be in a much stronger position to protect the wealth they have worked so hard to build.