Common Questions - 1 July 2027 CGT Reform FAQ

Mainly owners of residential investment or income-producing property held as individuals, trusts or partnerships. Owner-occupiers can be affected later if the property is rented, transferred, inherited or changes use. General information, not tax advice.

Property held on 30 June 2027 is treated as sold just before 1 July 2027 — at its market value at the end of 30 June 2027 — and reacquired on 1 July 2027 for that amount, which becomes the new cost base for gains after that date. Gains up to then keep the old rules.

Under the legislated reform (Act No. 49 of 2026), super funds including SMSFs sit outside the new 1 July 2027 CGT settings and keep their existing CGT settings, for property acquired on or after 20 September 1985. One exception reaches every owner: property that is still a pre-CGT asset on 30 June 2027 is deemed sold just before 1 July 2027 whoever holds it — that rule (s 112-175) is written by asset type, not by owner. SMSFs do have a separate annual market-value obligation (SIS Reg 8.02B) — confirm treatment with your adviser.

If a property may face CGT, a dated, independent valuation as at the end of 30 June 2027 (the market value just before 1 July 2027) is the cleanest evidence of the new cost base — harder and costlier to reconstruct later. Ask your accountant.

The reset value (market value at the end of 30 June 2027) can only be finalised once the date has passed, so valuation providers generally deliver signed reports from around July 2027. Some services allow earlier reservation — check timing with the provider you choose.

Under the legislated reform the blanket exemption for assets acquired before 20 September 1985 ends for gains after 1 July 2027. Those properties receive a deemed cost base equal to that same reset value, which makes dated valuation evidence especially important for long-held property. Confirm treatment with your tax professional.

The ATO’s market-valuation guidance expects an objective, supportable valuation — comparable sales evidence, a clear methodology and a qualified, independent valuer. A signed report prepared to that ATO-acceptable standard is stronger evidence than an agent’s appraisal or an online estimate. There is no “ATO-approved” valuation — no such status exists.

You can, and many advisers assume this makes waiting safe. A retrospective (backdated) valuation is legitimate — but it is not automatically worry-free: sales evidence goes cold, the property’s condition at the date must be reconstructed, and a weakly-evidenced number is easier to challenge years later. A contemporaneous valuation around the date itself is generally the cleanest evidence; retrospective is the fallback, not the plan.

For a CGT figure the inspected report is the one to price: on-site inspections start from about $646-$835 in this market, and market guides put standard residential valuations at roughly $300-$600. Signed desktop pathways start lower, around $279-$362, but a desktop involves no inspection and is not the level to lean on where the ATO may test the number. Scope matters more than price - a free estimate is not a signed valuation. See the property valuation service comparison for published examples.

An owner-occupied main residence generally keeps its exemption. The change matters if the home is later rented, used to produce income, transferred or inherited - the property can then face CGT with 1 July 2027 as a key valuation date. Check your position with a registered tax professional and see who is affected.

Under the legislated reform, most gains after 1 July 2027 no longer get the 50% discount (individuals, trusts, partnerships). Instead the cost base is indexed to CPI, and a minimum 30% tax rate (new Division 119) reaches Australian-resident individuals — a trust or partnership gain meets the floor once attributed to an individual. The discount is not abolished outright — it still applies to gains accruing up to 1 July 2027, and concessional treatment is retained for new residential dwellings and affordable housing. The reset value — market value just before 1 July 2027 — becomes the new cost base for property held on 30 June 2027 - see the reform glossary and timeline.

No — it is a choice. You can either obtain a market valuation as at the end of 30 June 2027 or use Treasury’s free apportioning method (a formula set by the Treasurer, with ATO tools to come, that estimates the 1 July 2027 value by assuming the property grew at one steady rate). A professional valuation matters when that steady-rate assumption would understate your property’s real 1 July 2027 value — strong recent growth, renovations, or an unusual property — or when you want independently defensible evidence. See our full explainer valuation vs the free formula and ask a registered tax professional which suits your case.

The discount-to-indexation change applies to CGT assets held by individuals, trusts and partnerships generally — property is where most people feel it, and it is this site’s focus. The negative-gearing change is specifically about residential property. For shares and other assets, ask a registered tax professional.

For property acquired on or after 20 September 1985, companies sit outside the new individual/trust settings — company gains are taxed under company rules, which never had the 50% discount. If a company holds your property, its position is a question for your accountant, not this reform’s headline changes.

Foreign and temporary residents sit outside the new individual/trust regime, and that cuts against them rather than for them. They are excluded from the 1 July 2027 deemed sale (s 112-155(1)(d)), so they get no cost-base reset, and the new cost-base indexation does not extend to them either (note 1 to s 110-36(1A), s 114-25). They have also long faced their own CGT settings for Australian property. Being “outside” the reform here means missing the relief, not escaping the tax — get advice specific to your residency. Overseas-based owners of Australian property should confirm their position with a registered tax professional, especially where residency may change.

Detailed transitional guidance for deceased estates around the reset date is still in development — see the ATO guidance tracker. Inheritance has always been a classic moment where dated valuation evidence matters; that does not change. Estate specifics belong with a registered tax professional.

Yes. Announced in the May 2026 Budget, it received royal assent on 26 June 2026 as the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49 of 2026). ATO guidance on valuation evidence and the apportionment tools continues to develop — follow it on the ATO guidance tracker and confirm the current position with a registered tax professional before acting.

The deemed disposal is a transition mechanism, not a bill in the mail — the legislation does not levy tax on that day for continuing owners. Its effect shows up in how future gains are calculated. Confirm specifics with your adviser.

Confirm whether you’re in scope, organise your cost base records, and plan how you’ll evidence the 1 July 2027 market value. The checklist at cgtready.com.au covers the basics in two minutes.

The report itself can only be finalised from July 2027, but preparation and reservation can happen earlier. Beware any promise of a completed “1 July 2027 valuation” before the date exists.

A sale settled under the old rules is taxed under the old rules — the reform applies to gains accruing after 1 July 2027, and the reset only matters for property still held on 30 June 2027. Whether selling earlier or holding suits you is a planning question for a registered tax professional, not something this site can answer.

No. The choice matters when a CGT event eventually happens — a sale, transfer or inheritance after 1 July 2027. But evidence is easiest to capture around the date itself: sales comparables and property condition are fresh. Waiting keeps options open at the cost of colder evidence.

The legislation frames the choice per asset. How it applies across a portfolio is a question for your registered tax professional once the instrument is final and ATO guidance is complete.

On-site inspections start from about $646 in this market — the inspected report is the one to budget for if the 1 July 2027 figure is ever tested. Signed desktop assessments start around $279, but without an inspection they carry less weight for that purpose. Whether that outlay is worth it depends on how far your property’s true 1 July 2027 value sits above the formula’s result — for many properties the answer is “not far”; for outperformers and renovated homes the gap can be a multiple of the fee. Compare pathways on the service comparison.

Both are legitimate — the formula is the alternative the legislation itself provides. The difference is evidentiary: a signed valuation is independent, dated and defensible on its own; the formula depends on your eventual sale price and holding dates. Neither is “ATO-approved” — no such status exists for valuations.

Purchase contracts and costs, capital improvement invoices and dates, rental-use history, and photos or reports evidencing the property’s condition around 1 July 2027. The formula leans on purchase/sale figures and dates; a valuation leans on condition and comparables — good records serve both. See what counts in your cost base.

No — it is a floor, not a flat rate, and that is settled in the Act rather than awaiting guidance. Under the method in s 119-10(2) you pay tax on the gain at your ordinary marginal rates; the Division then works out 30% of the gain, subtracts what those marginal rates already collected, and charges any shortfall as extra income tax. If your marginal rates already take 30% or more, there is nothing extra to pay — so it is not a cap either. s 119-15 switches the whole thing off for people receiving certain payments, including the age pension. Your own figures still need a registered tax professional.

The new settings apply to gains accruing after 1 July 2027. Growth up to the 1 July 2027 value is dealt with under the old rules — which is exactly why the 1 July 2027 value (valuation or formula) matters so much.

Yes, and the order is set by the Act rather than pending. The reform replaces the method in s 102-5(1): your current-year capital losses reduce gains at step 1 (deferred gains first), carried-forward net capital losses at step 2 in the same order, the discount percentage applies at step 5, and small-business concessions at step 6 — so losses are applied before the discount, as they are today. The 30% minimum then works on the gains remaining after step 6 (s 119-5(1)(a)). Indexation is not a step in that sequence at all: it changes the cost base (s 110-36(1A)), so it sizes the gain before any of this begins. What your own position produces is still a question for a registered tax professional.

The day the mechanics are confirmed in ATO guidance. The scaffold on this page is ready for numbers; guessing before then would mean publishing figures that could be wrong in every cell.

Online estimates (AVMs — CoreLogic, PropTrack, Domain and similar) and agent appraisals/CMAs are marketing and guidance tools, not signed valuations — no one takes professional responsibility for the number. The ATO’s market-valuation guidance points to objective, supportable evidence: comparable sales, a clear methodology and a qualified, independent valuer. Reset-specific standards are still developing — track them on the ATO guidance tracker and confirm with a registered tax professional.

A desktop assessment is prepared and signed by a qualified valuer who forms a professional opinion from comparable sales and property data — without a physical inspection, which is why the API Rules treat it as an indicative value rather than a full valuation. A data-only estimate is an algorithm’s output with no professional responsibility attached. Scope, not price, is the first thing to compare.

Investor forums are openly worried about this: one national date, finite valuer capacity. Two realities help. A valuation “as at 1 July 2027” can only be completed once the date arrives, so preparation beforehand is about records and reservations rather than finished reports. And retrospective valuations remain legitimate afterwards — the trade-off is that sales evidence and property-condition records get harder to assemble as time passes.

Under the legislated reform, gains accrued up to 1 July 2027 remain outside CGT for genuinely pre-CGT assets. It is the growth after that date that becomes taxable. Confirm your property’s status with a registered tax professional.

Major capital improvements or ownership changes can affect pre-CGT status under existing rules — some assets are already partly inside CGT. This is exactly the kind of detail to check with your accountant before assuming exemption.

The value that matters is market value just before 1 July 2027 — the end of 30 June 2027, which is when the law deems the sale to happen. Valuers establish it using sales evidence from around that date, so reports are typically delivered from July 2027 onward — and can be prepared retrospectively later, at greater difficulty and cost.

You would either reconstruct the value retrospectively — harder and more expensive once sales evidence has gone cold — or elect Treasury’s draft apportioning method, which is free but assumes steady growth across your whole ownership period. For property held since before 1985 that assumption stretches across decades, and because the pre-2027 gain is disregarded, the resulting figure is purely your cost base: any understatement adds directly to the gain you are taxed on. Worth modelling both with your accountant rather than defaulting to either.

No. The apportioning method is an exposure draft — consultation ran to 21 August 2026 — and may change before it is made. Anything you read about it — here or elsewhere — should be checked against the final instrument.

Possibly, in part — income use generally brings a portion of the ownership period into CGT, though exemptions (such as the absence rule) can change the outcome. The interaction is fact-specific: ask a registered tax professional.

It can — partial income use can require apportionment for CGT, supported by evidence of value and floor area. Ask your accountant before assuming the main-residence exemption fully protects you.

A dated, independent market valuation is the cleanest. Failing that: comparable sales from that period, the rental listing, photos and condition records — anything that helps a valuer reconstruct the value later (a retrospective valuation).

A main residence that never earns income is generally outside the legislated reform’s scope. It’s the change of use that pulls a home into CGT territory — which is why owner-occupiers who may rent later should still pay attention.

No. Under the legislated reform it is limited for residential property rather than abolished: full negative-gearing treatment is directed to new builds, while established residential investment property acquired on or before 7:30pm AEST on 12 May 2026 is exempt from the changes. Even for affected properties the deduction is restricted rather than destroyed — losses are deductible against residential-property income, with any excess carried forward, from the 2027-28 income year. Confirm details with a registered tax professional.

If you acquired it on or before 7:30pm AEST on 12 May 2026 — Budget night — it is exempt from the negative-gearing changes, so existing arrangements are protected. Your property is still within the separate CGT reset — its market value just before 1 July 2027 — at the end of 30 June 2027 — becomes the new cost base for future gains.

They are separate measures inside the same Act. Negative gearing concerns your annual rental deductions; the CGT reset concerns how gains after 1 July 2027 are calculated. An investment decision now usually needs to weigh both.

Newly built residential property retains full negative-gearing treatment under the reform. The CGT side may work differently from other property, not the same: s 112-155(1)(e) excludes from the 1 July 2027 deemed sale any asset for which the new residential dwelling concession (s 115-102) or the affordable housing concession (s 115-125) applies to the eventual gain — so such a property may need no 1 July 2027 value at all. Two cautions: “new residential dwelling” is not yet defined (the Act defers it to a Ministerial instrument that does not exist yet), and the test is applied when you eventually sell, not on 1 July 2027 — so it is not a status you can rely on today. Worth putting to a registered tax professional before deciding to skip dated evidence.

Not as at our last review (10 July 2026). Treasury’s material commits the ATO to providing tools for the formula approach; we will update this page and the newsletter when they land.

The ATO’s long-standing market-valuation guidance — objective, supportable evidence, clear methodology, a qualified and independent valuer — is the best current indicator of what strong evidence looks like. Reset-specific standards may add detail; a conservative approach is to meet the existing bar.

No published timetable as at our last review. Major reforms typically see guidance arrive in waves before commencement — another reason the 12 months before 1 July 2027 will be busy.