The new CGT rules: what applies now, what's already law, and what's still up in the air

What applies right now, as things stand

• The 50% CGT discount for individuals and trusts, on an asset held more than 12 months, still applies in full today — nothing has changed yet for a sale that happens before 1 July 2027.
• Negative gearing is also unrestricted right now: a loss on any residential property, however and whenever you bought it, can still be offset against your salary or other income under the current rules.
• Anything you sell between now and 30 June 2027 is taxed under these existing rules, in full — the reform below doesn't reach backwards.

What's already law, starting 1 July 2027

• The 50% CGT discount is replaced for individuals, trusts and partnerships by cost base indexation (adjusting what you paid for inflation) plus a 30% minimum tax on the real, indexed gain. If tax at your normal marginal rate would come to less than 30% of that real gain, a top-up applies to bring the total to 30%.
• The main residence exemption is untouched — your home stays fully CGT-exempt.
• People receiving income support, including the Age Pension, are exempt from the new minimum tax.
• Investors in new residential property get a choice between the old 50% discount or the new indexation-plus-minimum-tax treatment — a deliberate carve-out to keep the incentive to build new housing rather than buy existing stock.
• Separately, the turnover threshold for the small business 50% active asset CGT reduction is being lifted from $2 million to $10 million, with the other small business CGT concessions staying as they are.

The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed both houses of Parliament and received royal assent in June 2026. It isn't a proposal any more — it's law — but most of what it does is deliberately deferred to the 2027–28 income year.

Parliament of Australia: Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 ↗

The transition isn't a clean switch-over

An asset you already hold doesn't simply move onto the new rules on 1 July 2027 — the gain gets split. Growth that accrued before that date generally keeps the old 50% discount treatment; growth from that date onward falls under the new indexation and 30% floor.

That makes your original purchase price and date more important than ever, not less — you'll need both to work out the pre- and post-2027 portions of the gain when the asset is eventually sold.

Negative gearing: who it actually affects

• A residential property bought (contract entered into) before 7:30pm AEST on 12 May 2026 keeps the current, unrestricted negative gearing treatment, under grandfathering rules — but that protection is generally tied to the current owner, so a buyer of that same property later on may not inherit it.
• An established (not newly built) residential property bought after that cut-off has its losses quarantined from 1 July 2027: they can only be offset against rental income (from any property you hold), not your salary or other income, and carry forward if unused.
• A genuinely new build keeps full negative gearing — loss offsettable against any income — but generally only for its first purchaser; a later buyer of the same, now not-so-new, property doesn't get it.
• Commercial property isn't touched by any of this.

What's still just talk, not settled law

• A Senate committee driven by the Greens reported in March 2026 wanting more ambitious reform than what the Government ultimately legislated — they consider the final package too modest.
• The Coalition opposed the whole package and dissented from the committee report, arguing housing affordability is mainly a supply problem, not a tax one. If the Government changes at the next election, parts of this could still be revisited before 1 July 2027.
• Further detail on some edges of the reform — including a flagged new CGT concession for start-ups — hadn't been settled as this was written. Treat anything beyond what's described above as still moving.
• This is separate from two other proposals we've written about: the proposed minimum tax on family trusts (not yet law, proposed from 1 July 2028) and the separate reform to how large superannuation balances are taxed. Neither of those is the same thing as this CGT and negative gearing package.

What to actually do between now and 1 July 2027

• Nothing changes for a sale today — current CGT and negative gearing rules apply in full until the 2027–28 income year.
• Thinking about buying an investment property before the change takes effect? Whether it's an established property or a genuine new build, and exactly when you sign, will determine which negative gearing rules eventually apply to it — worth checking before you sign, not after.
• Holding shares, property or other assets you expect to sell after mid-2027? Keep rock-solid records of what you paid and when — the pre/post-2027 split calculation depends on it.

This is a genuinely complex reform and the detail is still settling. Talk to us before making a significant investment decision based on any of it, especially anything close to the 12 May 2026 property cut-off or the 1 July 2027 start date.