The 2026 federal budget confirmed significant changes to capital gains tax that will affect property investors and anyone holding CGT assets from 1 July 2027.
The debate about whether these changes are fair has dominated the coverage. That debate will continue. This article is not about that. It is about what the changes mean practically for investors who already have a plan, and whether that plan still holds.
These decisions are made well outside our control. What is inside our control is how well we understand them and what we do next.
The timing lever that no longer works
The 50% CGT discount has applied since 1999 and was blunt but predictable. Hold an asset for more than twelve months, pay tax on half the gain. Investors could time a sale around a lower income year. Retirement, a career break, a lean business year. And reduce the CGT hit meaningfully.
That lever has been removed.
From 1 July 2027, only the gain above inflation is taxable. A 30% minimum tax then applies to that indexed gain. If your marginal rate falls below 30%, a top-up makes up the difference. Timing the sale to a low-income year no longer reduces the hit the way it once did.
It is worth noting this reform applies equally to all CGT assets, including shares, ETFs and other investment vehicles. Switching asset classes does not solve the sequencing problem. It relocates it. How this applies will also depend on the structure through which you hold your assets. This is a key reason a conversation with your accountant now matters.
For investors whose exit strategy implicitly assumed that lever existed, the plan has changed. Not because the asset is worth less. Because an assumption that sat quietly in the background no longer holds. The risk now is carrying a plan built on rules that have shifted without realising it.