The 50% CGT discount, and what changes from 1 July 2027

Sell an investment property today after holding it more than 12 months, and the ATO generally lets you apply a 50% capital gains tax (CGT) discount: only half the capital gain gets added to your taxable income. That's current law, and it's what applies to any sale that happens before 1 July 2027.

From that date, a separate law (the Treasury Laws Amendment (Tax Reform No. 1) Act 2026) changes how most residential investment properties are taxed on sale. It isn't property-specific: the reform changes CGT for every kind of asset an individual or trust holds, shares and collectables included. This article — and BrickTrack — covers the property side of it.

What counts toward the gain

The gain is the sale price minus your cost base (purchase price plus acquisition costs like stamp duty and conveyancing, less any capital works you've already claimed). Keeping clean records from day one is what makes the figure defensible, and BrickTrack tracks your cost base as you go so it's ready whenever you sell.

Selling before 1 July 2027

Nothing changes. Hold the property more than 12 months and the gain qualifies for the 50% discount, same as it always has. Losses are never discounted, and that stays true either side of the change.

Selling from 1 July 2027

For most existing residential properties, the flat 50% discount is replaced by cost base indexation: your cost base is adjusted for inflation from 1 July 2027 onward, using ATO index numbers published each quarter, and the taxed gain is whatever's left after that adjustment. New residential dwellings are the exception and keep the 50% discount as the default, though the owner can elect indexation instead.

Because the change applies from a fixed date rather than resetting your ownership clock, a property you've held since before 2027 splits into two pieces at sale: the growth up to 30 June 2027 is worked out under today's rules (with the 50% discount still available on that slice), and the growth from 1 July 2027 onward is worked out under the indexed system. You don't do anything to trigger this split — it's how the gain is calculated when you eventually sell, whether that's in 2028 or 2045.

There's also a separate 30% minimum tax that can apply to a resident individual's capital gains from 1 July 2027. It only tops up your bill if what you'd otherwise pay comes in under 30% of the gain; it isn't a flat rate charged on top of everything else, and because the cost base is indexed first, the gain it's calculated on is already smaller than the raw sale-price difference.

What this doesn't change

This reform is entirely separate from negative gearing, which has its own 2027 changes and its own cutoff date. It's also unrelated to any tax on unrealised gains — there isn't one for property, and none has been proposed. BrickTrack is not tax advice: confirm your own position with your accountant, especially for anything you sell after 1 July 2027.