Services / 2027 CGT Guide
The 1 July 2027 CGT changes: what property owners need to know
Short answer: from 1 July 2027, the 50% capital gains tax discount is being replaced by cost-base indexation plus a 30% minimum tax for affected assets, and pre-1985 properties lose their CGT-free status for gains that build up afterwards. If you own an investment property, the practical step is a professional market valuation dated as close to 1 July 2027 as possible, so any eventual capital gain can be split fairly between the old rules and the new ones. This guide walks through what's changing, why the valuation date matters, and when to get one.
What's actually changing
Three changes take effect from 1 July 2027 for affected assets:
- The 50% CGT discount is replaced by cost-base indexation — your original purchase price is adjusted for inflation rather than simply discounted by half.
- A 30% minimum tax applies to real (inflation-adjusted) gains for affected assets, changing the effective tax outcome compared to the current discount method.
- Pre-1985 properties lose their blanket CGT exemption for gains that accrue from the transition date onward — the pre-1985 portion of the gain can remain exempt, but growth after the cut-over is taxed under the new regime.
This is a genuine, multi-source-confirmed reform — not a proposal — though the exact application to your circumstances depends on your own tax position. Confirm the detail with your accountant or registered tax agent.
Why the valuation date matters
Because the rules either side of 1 July 2027 are different, the ATO's practical approach is to split a property's total capital gain into a pre-transition portion (taxed under the old rules) and a post-transition portion (taxed under the new rules). That split relies on knowing what the property was worth on the transition date — which means a market valuation as at 1 July 2027, prepared by an independent, suitably qualified valuer, rather than an estimate reconstructed years later.
When should you actually get it done?
The Australian Property Institute's guidance is to obtain the transition valuation roughly three to four months after 1 July 2027, and at the very latest within two years of that date. It isn't a hard legal deadline, but the longer you wait, the weaker the evidentiary basis becomes — comparable sales age, and the valuer has less first-hand context to draw on. Demand is expected to build through late 2027 and stay elevated into 2028–29 as investors and their accountants work through the transition, so booking ahead of that peak is worth considering.
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An illustrative example (not tax advice)
Say an investor bought a Melbourne unit in 2010 and is still holding it in 2029. Under the transition approach, the eventual capital gain when they sell would typically be apportioned into a pre-2027 portion (assessed under today's 50% discount rules, based on the property's value in 2010 versus its 1 July 2027 valuation) and a post-2027 portion (assessed under the new cost-base indexation and 30% minimum tax rules, based on the 1 July 2027 valuation versus the eventual sale price). Without a dated, independent valuation as at 1 July 2027, there's no clean way to draw that line — which is exactly the evidence a CGT & Tax Valuation is designed to provide. This example is simplified for illustration only; real calculations depend on your specific facts and should be run by your accountant.
CGT valuation FAQs
Do I definitely need a valuation before 1 July 2027?
Not by a fixed legal deadline — but the Australian Property Institute recommends obtaining your transition valuation roughly three to four months after 1 July 2027, and at the very latest within two years. The longer you wait, the harder it becomes to reconstruct reliable evidence of the property's condition and the local market as at that date.
What exactly changes on 1 July 2027?
For affected assets, the current 50% CGT discount is replaced by cost-base indexation combined with a 30% minimum tax on real (inflation-adjusted) gains. Properties purchased before 20 September 1985, which are currently exempt from CGT altogether, lose that exemption for any gain that accrues after the transition date — meaning the pre-1985 portion of the gain may still be CGT-free, but the post-1985-to-2027 and post-2027 portions are treated differently again.
Why can't I just use an online estimate or my council rates notice?
Automated valuation models and council land valuations are built for a different purpose — mass-market estimation and land tax, respectively — not for defending a specific tax position to the ATO. The ATO expects evidence from a suitably qualified, independent valuer who can explain the methodology and comparable sales behind the figure. That's the gap our CGT & Tax Valuation is built to close.
How is a CGT valuation different from a standard valuation?
A CGT valuation starts from our Full Internal & External Inspection — the most thorough level we offer — and adds an ATO-ready report format, retrospective ('as at' a specific past date) valuation methodology, and commentary written to support cost-base indexation and pre/post-transition apportionment.
Will this valuation tell me exactly how much tax I'll pay?
No — a valuation establishes the property's market value as at a given date; it doesn't calculate your final tax liability, which depends on your full financial position, other assets, and how you or your entity are taxed. Use the valuation as an input for your accountant or registered tax agent, who can then work out the actual CGT outcome.
Sources: Australian Property Institute guidance on the 2027 CGT transition; PwC Australia tax reform commentary; RBA Bulletin (May 2026) on investor property ownership. This page will be reviewed and updated as further ATO guidance is published.