Capital Gains Tax Australia: Budget Changes 2027
Capital Gains Tax Australia: Budget Changes, Calculator Examples and What Investors Should Know
Australia’s Budget proposes major capital gains tax changes from 1 July 2027. The Government says it will replace the 50% CGT discount with an inflation-based discount and introduce a minimum 30% tax on gains from that date.
This guide explains how capital gains tax works now, what the Budget says will change, how property and share investors may be affected, and how to think about CGT calculator examples for assets bought in 2016, 2024 and later years.
Quick answer: is capital gains tax changing in Australia?
Yes. The Budget says the Government will replace the 50% CGT discount with an inflation-based discount and introduce a minimum 30% tax on gains from 1 July 2027. The reforms will only apply to gains arising after 1 July 2027, according to the Australian Budget tax reform page.
Key takeaways
- The current 50% CGT discount is proposed to be replaced with an inflation-based discount from 1 July 2027.
- The Budget also announces a minimum 30% tax on gains from 1 July 2027.
- The CGT reforms only apply to gains arising after 1 July 2027.
- Investors in new builds may be able to choose between the 50% CGT discount and the new arrangements.
- Negative gearing changes are separate, but they may affect property investor decisions from 1 July 2027.
- Final calculations should wait for legislation and ATO guidance.
Important note
This article is general information only and is not tax advice. The Budget announcement gives the policy direction, but detailed law, ATO guidance and calculation mechanics may still change before the 1 July 2027 start date.
Table of contents
What is capital gains tax in Australia?
Capital gains tax in Australia is the tax outcome that can arise when you sell, transfer, lose or otherwise dispose of a CGT asset. It is not usually a separate tax bill by itself. Your net capital gain is included in assessable income and taxed through your income tax return.
The ATO explains that CGT can apply when assets are sold, lost or destroyed, and it covers assets such as real estate, rental properties, shares, inherited assets and certain distributions through the ATO capital gains tax guide.
| Term | Plain English meaning |
|---|---|
| Capital gain | The profit you make when capital proceeds exceed your cost base. |
| Capital loss | The loss you make when the reduced cost base is more than the capital proceeds. |
| Cost base | Broadly, what the asset cost you, plus certain eligible costs such as purchase costs and capital improvements. |
| CGT event | The transaction or event that triggers the CGT calculation, such as selling an asset. |
| CGT discount | A discount that may reduce the taxable capital gain when the asset and taxpayer qualify. |
What are the latest capital gains tax Budget changes in Australia?
The latest Budget capital gains tax announcement has three main parts: replacing the 50% CGT discount with an inflation-based discount, introducing a minimum 30% tax on gains, and applying the reforms only to gains arising after 1 July 2027.
The Budget states that the Government will replace the 50% CGT discount with a discount based on inflation and introduce a minimum 30% tax on gains from 1 July 2027 through the Australian Budget tax reform announcement.
| Issue | Current position | Budget proposal | Start date |
|---|---|---|---|
| CGT discount | 50% discount may apply to eligible assets. | Discount based on inflation. | 1 July 2027. |
| Minimum tax on gains | No separate Budget-style minimum 30% rule. | Minimum 30% tax on gains. | 1 July 2027. |
| New builds | Current CGT rules apply. | Choice between 50% discount and new arrangements. | 1 July 2027. |
| Negative gearing | Existing rules apply. | Limited to new builds, with grandfathering for properties held before Budget night. | 1 July 2027. |
Capital gains tax calculator Australia: how to calculate CGT now
A capital gains tax calculator in Australia usually starts with capital proceeds, subtracts the cost base, applies capital losses, checks the 12-month discount rule, and then includes the taxable gain in assessable income. The tax payable depends on your marginal tax rate.
Simple current-law CGT formula
Capital proceeds minus cost base equals capital gain. Then subtract capital losses. If eligible, apply the CGT discount. The remaining net capital gain is included in taxable income.
Example 1: current CGT calculation on an investment property
This is a simplified example only. It ignores stamp duty details, selling costs, depreciation adjustments, capital works and other tax factors.
| Purchase price | $600,000 |
| Eligible buying and improvement costs | $40,000 |
| Simplified cost base | $640,000 |
| Sale price | $900,000 |
| Selling costs | $20,000 |
| Capital proceeds after selling costs | $880,000 |
| Capital gain before discount | $240,000 |
| 50% CGT discount if eligible | $120,000 taxable capital gain |
If the taxpayer’s marginal tax rate is 37% plus Medicare levy, the final tax impact depends on the full tax return. A simple estimate at 39% on a $120,000 taxable gain would be $46,800. This is only a simplified calculator-style example.
Capital gains tax example: asset bought in 2016 vs 2024
An asset bought in 2016 may have a large unrealised gain before the new start date, while an asset bought in 2024 may have more of its gain arising closer to or after 1 July 2027. This matters because the Budget says the new CGT reforms apply only to gains arising after 1 July 2027.
Legislation needed before exact apportionment
The Budget says reforms apply to gains arising after 1 July 2027, but the detailed method for splitting pre- and post-1 July 2027 gains needs legislation or ATO guidance. The examples below are theoretical and should not be used as advice.
Example 2: asset bought in 2016 and sold before 1 July 2027
This example shows the current CGT discount approach if the asset is sold before the reform start date and qualifies for the 50% discount.
| Item | Amount |
|---|---|
| Bought in 2016 | $500,000 |
| Cost base after eligible costs | $540,000 |
| Sold in 2026 | $850,000 |
| Selling costs | $20,000 |
| Capital proceeds after selling costs | $830,000 |
| Capital gain before discount | $290,000 |
| 50% CGT discount if eligible | $145,000 taxable capital gain |
Example 3: asset bought in 2024 and sold after 1 July 2027
This theoretical example shows how an inflation-based discount could work in concept. The final calculation may differ once law and ATO guidance are released.
| Item | Amount |
|---|---|
| Bought in 2024 | $700,000 |
| Simplified cost base | $730,000 |
| Sold in 2028 | $900,000 |
| Selling costs | $20,000 |
| Capital proceeds after selling costs | $880,000 |
| Nominal gain before inflation adjustment | $150,000 |
| Theoretical inflation-adjusted cost base, assuming 10% cumulative inflation | $803,000 |
| Theoretical real capital gain | $77,000 |
In this example, the inflation-based method reduces the taxable gain from the nominal $150,000 to a theoretical real gain of $77,000. The minimum 30% tax rule may matter if the final law requires at least 30% tax on the relevant gain.
Example 4: why buying year matters
The purchase year matters because an older asset may contain more gain before 1 July 2027, while a newer asset may have more gain arising after that date. The final law needs to explain how gains spanning both periods will be measured.
| Asset | Bought | Sold | Main planning issue |
|---|---|---|---|
| Investment property A | 2016 | 2028 | How pre- and post-1 July 2027 gains are split. |
| Investment property B | 2024 | 2028 | More gain may fall closer to the new regime period. |
| New build property | 2027 onward | Later year | Budget says investor may choose between 50% discount and new arrangements. |
Capital gains tax on property in Australia
Capital gains tax on property can apply to investment properties, land, rental properties, inherited property and homes that do not fully qualify for the main residence exemption. Property investors should also consider selling costs, capital improvements, depreciation adjustments and ownership structure.
The ATO explains that CGT affects real estate, including rental properties, land, improvements and your home through its capital gains tax guidance.
Property investor example: negative gearing and CGT together
The Budget says negative gearing will be limited to new builds from 1 July 2027, existing arrangements will remain unchanged for properties held before Budget night, and buyers of established housing after Budget night can carry forward unused losses but cannot deduct them against wages through the Budget tax reform page.
| Investor situation | CGT issue | Negative gearing issue | Planning point |
|---|---|---|---|
| Property held before Budget night | Watch sale timing and post-2027 gain rules. | Budget says existing arrangements remain unchanged. | Rebuild cost base records now. |
| Established property bought after Budget night | Future gains may fall under new CGT rules. | Losses may not offset wages, but may be carried forward. | Model cash flow without wage offset. |
| New build investment property | Budget says choice may apply between 50% discount and new arrangements. | Negative gearing may still apply to new builds. | Compare after-tax outcomes before buying. |
Capital gains tax on shares, ETFs and crypto
Capital gains tax on shares, ETFs and crypto can apply when you sell or dispose of the asset. Investors should keep purchase records, sale records, brokerage costs, dividend reinvestment details, crypto wallet history and any capital loss records.
The ATO states that CGT events can include selling shares or receiving certain distributions, and that taxpayers should keep records of acquisition date, ownership share and asset details through the ATO CGT guide.
Example 5: shares bought in 2024 and sold in 2028
| Shares bought in 2024 | $40,000 |
| Brokerage and other eligible costs | $500 |
| Simplified cost base | $40,500 |
| Sold in 2028 | $70,000 |
| Capital gain before adjustment | $29,500 |
| Current 50% discount if sold under current eligible rules | $14,750 taxable capital gain |
Under the proposed new system, the investor would need to check the inflation-based calculation and the minimum 30% tax rule once final rules are released.
Is the Budget change an unrealised capital gains tax in Australia?
The Budget page does not describe an annual tax on unrealised capital gains. It says the CGT reforms will only apply to gains arising after 1 July 2027, and it describes changes to the discount method and minimum tax on gains.
Searches for “unrealised capital gains tax Australia” are likely rising because people are trying to understand whether paper gains will be taxed before sale. Based on the Budget wording, the page refers to CGT reforms on gains, not a yearly wealth tax on unsold assets.
How to prepare for capital gains tax changes before 1 July 2027
Investors should prepare for the CGT changes by improving records, modelling possible sale dates and checking how the rules may affect property, shares, ETFs, crypto, inherited assets and trusts. The best first step is not selling. It is getting accurate numbers.
CGT planning checklist
- Find the original purchase contract or broker statement.
- Record the acquisition date and ownership percentage.
- Collect stamp duty, legal, brokerage and agent fee records.
- Separate repairs from capital improvements.
- Review depreciation and capital works claims for rental property.
- Check carried-forward capital losses.
- Check whether the main residence exemption or partial exemption may apply.
- Model sale before and after 1 July 2027.
- Do not restructure property, trusts or companies without advice.
- Wait for final legislation before making irreversible tax decisions.
Capital gains tax Australia FAQs
What is capital gains tax in Australia?
Capital gains tax is the tax outcome when you make a capital gain on a CGT asset. The net capital gain is generally included in assessable income and taxed at your marginal tax rate.
How much is capital gains tax in Australia?
There is no single CGT rate for most individuals under current rules. Your net capital gain is included in taxable income and taxed at your marginal tax rate, after applying any capital losses and eligible CGT discount.
Is the 50% CGT discount being removed?
The Budget says the Government will replace the 50% CGT discount with an inflation-based discount from 1 July 2027. It also says investors in new builds may choose the 50% discount or the new arrangements through the Budget tax reform page.
When do the new capital gains tax rules start?
The Budget says the CGT reforms start from 1 July 2027 and only apply to gains arising after 1 July 2027 through the Australian Budget announcement.
How do you calculate capital gains tax?
Start with the sale proceeds, subtract the cost base, apply capital losses, then apply any eligible discount. The remaining net capital gain is included in your taxable income. Property, shares, crypto and inherited assets can each have extra rules.
Does capital gains tax apply to investment property?
Yes, CGT can apply to investment property. The ATO says CGT affects real estate, including rental properties, land, improvements and your home through its capital gains tax guidance.
Does capital gains tax apply to shares?
Yes, CGT can apply when shares are sold or when certain distributions are received. Investors should keep purchase dates, sale records, brokerage costs and dividend reinvestment records.
Will the family home be affected by capital gains tax?
The main residence exemption can reduce or eliminate CGT on a home, but partial CGT may apply in some cases, such as where the home was used to produce income or was not always the main residence.
Should I sell before 1 July 2027?
Not automatically. Selling before 1 July 2027 may suit some investors, but the decision depends on the asset, gain size, holding period, transaction costs, future growth, cash flow and final legislation.
Is this an unrealised capital gains tax?
The Budget page does not describe a yearly tax on unrealised gains. It describes replacing the CGT discount with an inflation-based discount and introducing a minimum 30% tax on gains from 1 July 2027.
Related Eduyush guides
- Negative gearing Australia
- Negative gearing calculator
- Capital gains tax Australia
- Discretionary trust changes
- Trust distribution tax
- IAS 40 investment property
Editor notes before publishing
- Verify final legislation once released, especially the method for gains that span 1 July 2027.
- Update examples once Treasury or ATO publishes worked examples.
- Add a proper calculator widget later for property, shares and crypto scenarios.
- Consider a separate blog for “capital gains tax calculator Australia” because that keyword has strong search demand.
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