From 1 July 2027, the 50% CGT discount will be replaced by cost-base indexation for assets held for more than 12 months, with a 30% minimum tax on net capital gains.
These changes will apply to all assets — including pre-CGT assets — held by individuals, trusts and partnerships.
Transitional arrangements will limit the impact on existing investments by ensuring the changes only apply to gains accruing on or after 1 July 2027. The 50% CGT discount will continue to apply to gains that accrued before 1 July 2027, and capital gains on pre-CGT assets that accrued before that date will remain exempt from CGT.
Investors in new residential properties will be able to choose either:
Income support payment recipients, including Age Pension recipients, will be exempt from the minimum tax. Assets sold prior to 1 July 2027 will continue to be subject to the existing rules.
The Government will provide a time-limited, targeted concession in the foreign resident CGT regime for investment in the renewables sector. The transitional arrangement will apply to foreign investors disposing of certain renewable energy infrastructure assets from commencement — the first day of the next quarter after Royal Assent — until 30 June 2030.
The table below outlines how the new rules (including the transitional rules) will broadly apply, based on the Federal Budget announcement.
| CGT asset category | CGT treatment on disposal |
|---|---|
| A. Pre-CGT assets (acquired before 20 September 1985) | |
| 1. Disposed of before 1 July 2027 | Full exemption — the capital gain is exempt in full in accordance with the current rules. |
| 2. Disposed of on or after 1 July 2027 | Partial exemption — apportioned via a split calculation: gains accrued before 1 July 2027 remain CGT-exempt; gains accrued on or after 1 July 2027 use indexation and the 30% minimum tax (using the asset's value at 1 July 2027 as its cost base). |
| B. Post-CGT assets — acquired BEFORE 1 July 2027 (held more than 12 months) | |
| 3. Disposed of before 1 July 2027 | 50% CGT discount — taxable capital gain (after applying any capital losses) can be reduced by 50% in accordance with the current rules. |
| 4. Disposed of on or after 1 July 2027 | Split calculation — gains accrued before 1 July 2027: the 50% discount can apply to the difference between the cost base and the asset's value at 1 July 2027. Gains accrued on or after 1 July 2027: indexation and the 30% minimum tax apply (using the 1 July 2027 value as the cost base). |
| C. CGT assets — acquired ON OR AFTER 1 July 2027 (held more than 12 months) | |
| 5. Disposed of on or after 1 July 2027 | Indexation & 30% minimum tax — cost-base indexation applies with a 30% minimum tax on net capital gains. No 50% discount is available (unless the "new build" exemption applies). |
| D. Eligible "new build" residential properties (those that genuinely increase supply) | |
| 6. Disposed of on or after 1 July 2027 by the first purchaser | Election — eligible investors can choose either the 50% CGT discount, or cost-base indexation and the 30% minimum tax. |
| 7. Disposed of on or after 1 July 2027 by a subsequent purchaser | Indexation & minimum tax — cost-base indexation with a 30% minimum tax. The first-purchaser election is not available. |
| E. Special rules and exemptions | |
| 8. Main residence | No change — the main residence CGT exemption continues under the current rules. |
| 9. Small business CGT concessions | No change — all four concessions continue: the 15-year exemption, 50% reduction, retirement exemption, and roll-over. |
| 10. Recipients of means-tested income support payments | Exempt from the 30% minimum tax — individuals receiving means-tested support (e.g. Age Pension or JobSeeker) in the year they realise a gain are exempt from the minimum tax only (indexation may still apply). |
| 11. Assets held by companies | No change — companies have never accessed the 50% discount, so the changes have no impact. |
| 12. Assets held by super funds (including SMSFs) | No change — super funds can generally continue to access the one-third CGT discount under the current rules. |
| 13. Qualifying affordable housing | No change — the existing 60% CGT discount for qualifying affordable housing is fully retained. |
| 14. Early-stage and start-up businesses | Consultation pending — the Government will consult on how the CGT changes interact with incentives for early-stage and start-up investment. |
Related reading: Reforming negative gearing → and our Federal Budget 2026–27 overview →
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