What are the proposed capital gains tax changes in Australia?

From 1 July 2027 the Government proposes to replace the 50% CGT discount with inflation-adjusted cost-base indexation and introduce a minimum 30% tax rate on net capital gains. Only the portion of a gain above inflation would be taxed, but at full marginal rates with a 30% floor. Source: Budget 2026–27 tax reform (budget.gov.au).

When do the CGT changes start?

The new rules apply to gains accruing from 1 July 2027. The existing 50% discount continues for gains realised before that date, and for assets held across the date, gains accrued up to 1 July 2027 keep the 50% discount.

What is cost-base indexation?

Indexation increases the original purchase price (cost base) of an asset in line with inflation before the gain is calculated, so only the real gain above inflation is taxed. It is modelled on the indexation method that operated between 19 September 1985 and 21 September 1999 (ITAA 1997 Division 114).

Which assets are affected by the CGT changes?

CGT applies to assets such as investment property and land, shares, ETFs and managed-fund units, cryptocurrency, business assets and goodwill, collectibles over $500, and units in trusts. Your main residence, personal-use assets under $10,000, and cars are generally exempt.

Does the 30% minimum tax apply to everyone?

The 30% minimum rate binds only when a person’s marginal rate on the gain would otherwise be below 30% — for example a low-income earner or someone realising gains after retirement. Most middle and high earners already pay above 30% on a large gain, so for them the removal of the 50% discount is the bigger change.

Australia’s proposed capital gains tax changes (from 1 July 2027)

The 2026–27 Federal Budget proposes to replace the long-standing 50% CGT discount with inflation-adjusted cost-base indexation and a minimum 30% tax rate on net capital gains. For most investors this means a larger taxable gain — and a bigger tax bill.

Last revised 2 June 2026

What is changing

50% discount removed. Instead of halving the gain, your cost base is increased for inflation, so only the real gain above inflation is taxed.
30% minimum tax. Net capital gains are taxed at the higher of your marginal rate or 30% — designed to stop deferring sales to a low-income year.
Transitional rules. Gains accrued before 1 July 2027 keep the 50% discount; the new method applies to gains accruing after. Buyers of new builds may elect the old discount.

Worked example: a $250,000 gain on $95,000 income

Shares or a business holding bought in 2021 for $250,000, now worth $500,000 (a $250,000 nominal gain), held more than 12 months. Earner on $95,000 salary in NSW (FY2025-26 rates). The table compares what an Australian citizen pays to the ATO versus what a Chinese citizen pays to China’s tax authority on an equivalent gain.

	🇦🇺 Australian citizen — ATO		🇨🇳 Chinese citizen — China IIT
Metric	Current law 50% discount (Div 115)	Proposed from 2027 Indexation + 30% min	Unlisted / business 20% flat	Listed A/B shares Exempt
Taxable gain	$125,000	$189,571	$250,000	—
Tax payable	$48,350	$78,699	$50,000	$0
Effective rate	19.3%	31.5%	20.0%	0% (exempt)
Net differencevs AU today	baseline	+$30,349	+$1,650	−$48,350

The proposal taxes roughly $30,349 more than today’s Australian rules — about 63% more tax on the same gain ($78,699 vs $48,350). Indexation shelters only the inflation slice of the gain, but losing the 50% discount exposes the rest to 37–45% marginal rates.

For the same gain, a Chinese-resident individual would generally pay no capital gains tax when selling listed A/B-share holdings, and a flat 20% on gains from property or unlisted/business transfers — China has no equivalent of Australia’s marginal-rate CGT.

The Chinese IIT columns are an educational rate comparison only — not tax advice and not a strategy. Australian tax residents are taxed by the ATO on their worldwide capital gains regardless of where the asset is held (ITAA 1997). Selling an asset through a Chinese entity does not avoid Australian CGT, though a foreign income tax offset may apply for tax paid overseas.

Model your own extra CGT

Enter your income and assets to see your estimated extra tax in seconds.

Open the CGT changes calculator →

What assets are subject to CGT?

Capital gains tax can apply when you sell or dispose of:

Investment property and land
Shares, ETFs and managed-fund units
Cryptocurrency
Business assets and goodwill
Collectibles over $500 (art, jewellery)
Units in trusts
Foreign currency and contractual rights

Generally exempt: your main residence, personal-use assets under $10,000, cars, and pre-CGT assets acquired before 20 September 1985 (though the proposal would tax post-2027 gains on pre-CGT assets).

Timeline

Now → 30 June 2027: 50% discount applies in full.
From 1 July 2027: indexation + 30% minimum tax on new gains.
Held across the date: pre-2027 gains keep the discount; post-2027 gains use the new method.

Frequently asked questions

What are the proposed capital gains tax changes?+

From 1 July 2027 the 50% CGT discount is replaced by inflation indexation of the cost base, plus a minimum 30% tax on net capital gains (Budget 2026–27).

When do they start?+

Gains accruing from 1 July 2027. Gains accrued before that date keep the 50% discount.

Will my home be taxed?+

Your main residence remains generally exempt. The changes target investment assets like shares, business interests and investment property.

See your estimated extra tax

Free, no sign-up — model shares and business gains.

Open the calculator →

Wondering why indexation still leaves you worse off? See the CPI-vs-shares data and the “2× inflation” rule.

How the 2027 Budget hurts your wealth →

Buying an investment property after 2027? The rules differ — model the full picture on aftertax.

Try aftertax →