Learn · How gains are taxed
What changes on 1 July 2027, when the 50% CGT discount ends
The 50% discount is replaced by cost base indexation and a 30% minimum tax rate. It is already law. Gains accruing before the changeover keep the old treatment, which makes purchase records matter more, not less.
On 12 May 2026, as part of the 2026-27 Federal Budget, the government announced it would replace the 50% capital gains tax discount. That announcement is no longer a proposal. The ATO states plainly that the measures are now law, enacted through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.
What actually changes
- The 50% discount for individuals, trusts and partnerships is replaced by cost base indexation — the cost base is lifted for inflation, so only the real gain is taxed.
- A minimum tax rate of 30% applies to capital gains.
- Both apply from 1 July 2027.
- Investors in new builds may choose between the 50% discount and the new arrangements.
The stated intent is that investors pay tax on their real gain rather than on inflation. Whether any individual ends up better or worse off depends on how long they held, how much of the gain was inflation, and what marginal rate they were on. A short hold in a low-inflation stretch loses a 50% discount and gains very little indexation. A long hold through high inflation can go the other way.
The part that affects your records
The reform applies only to gains arising on or after 1 July 2027. Gains that arose before then keep the 50% discount. For anything bought before the changeover and sold after it, that means a single sale produces a gain that has to be split across two different regimes.
One asset, two sets of rules
Bought March 2024
Sold March 2029
Gain accruing up to 30 June 2027
→ 50% discount, old rules
Gain accruing from 1 July 2027
→ indexation + 30% minimum rate
The published guidance available at the time of writing states that the reform applies only to gains arising after 1 July 2027, but does not set out the mechanism for apportioning a gain across that date. That mechanism is the detail that matters most for record keeping, and it is worth watching for rather than assuming.
What is worth doing about it
Nothing about the changeover rewards guessing, and none of it is a reason to buy or sell anything. What it does reward is knowing what you actually hold: purchase dates, cost bases and parcels, recorded accurately, before a boundary date arrives that makes them matter twice over.
Separately, a minimum 30% tax on discretionary trusts starts 1 July 2028, and rollover relief runs for three years from 1 July 2027 for those restructuring. Both sit outside what most individual investors need to track.
Where this comes from
Written against ATO — Reforming negative gearing and capital gains tax, last updated 29 June 2026. Checked 1 September 2026.
General information about how the rules work, not financial or tax advice. Your own circumstances change the answer.
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