The 50% CGT discount has been a fixture of Australian tax planning since 1999. From 1 July 2027, it's being replaced with indexation and a 30% minimum tax rate on capital gains.
Here's the shape of the new system. For assets held at least 12 months and sold after 1 July 2027, your cost base will be indexed for inflation using CPI. The indexed gain is then taxed at no less than 30%. The pre-CGT exemption (for assets acquired before 20 September 1985) is also being abolished, with transitional rules to provide a deemed cost base.
Indexation versus the discount changes the answer depending on how long you hold and how much inflation runs. In a low-inflation environment, the new regime is harsher than the discount. In a higher-inflation environment, the gap narrows. Either way, the floor of 30% is a meaningful change for anyone whose marginal rate would otherwise sit below that.
The transitional rules matter. Gains accrued up to 30 June 2027 will be preserved under the existing discount approach, with a market-value cost base reset available for assets straddling the changeover. This creates a real planning window for owners sitting on appreciated assets.
What to think about between now and 30 June 2027:
- Properties, shares, and business assets sitting on a meaningful gain
- Whether any restructures are worth completing before the changeover
- Pre-CGT assets, which lose their exemption and need a clear-eyed valuation
- Timing of sales already on the horizon for the next 18 months
A word of caution. Don't sell good assets for tax reasons alone. The point is to make informed decisions, not panic-driven ones. Talk to us first.