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1 July 2027

When Does the 50% CGT Discount End? What Changes on 1 July 2027

Short answer

It doesn't end on a date. From 1 July 2027 the 50% discount stops applying to growth after that day. The growth up to 30 June 2027 keeps the 50% discount, whether you sell in 2027, 2035 or 2050.

Many people have heard “the CGT discount ends on 1 July 2027” and taken it to mean they must sell before then. That is the most common misunderstanding of the whole reform. The law splits a gain into two parts, and only the later part is treated differently.

How the split works
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If you are an individual or a trust and you hold an asset on 30 June 2027, the law treats you as selling it just before 1 July 2027 and buying it back straight away, at its market value (the cost base reset). No tax is payable on that deemed sale at the time. The gain up to that date is set aside until you actually sell, and it is then taxed under the old rules, including the 50% discount.

The growth after 1 July 2027 is taxed under the new rules: the cost base is indexed to CPI instead of discounted, and an Australian-resident individual pays at least 30% on it.

A worked example
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These figures are illustrative only and ignore costs.

Bought in 2015$600,000
Market value at 30 June 2027$1,000,000
Sold in 2032$1,200,000
  • Growth to 30 June 2027: $400,000. It keeps the 50% discount, so $200,000 is taxable.
  • Growth after 1 July 2027: $200,000. The $1,000,000 cost base is indexed to CPI. If prices rose 15% over those five years, the indexed cost base is $1,150,000 and $50,000 is taxable, at a rate of at least 30%.

Selling before 1 July 2027 would not have taxed that pre-2027 growth any more kindly. It would only have been taxed sooner.

Who keeps the discount on later growth too
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  • New builds. For a qualifying new residential dwelling the 50% discount keeps applying automatically after 1 July 2027. The owner can choose to switch to indexation instead.
  • Affordable housing. The existing discount of up to 60% stays.
  • Super funds, including SMSFs. They keep their own one-third discount. The one exception is an asset bought before 20 September 1985, which gets the reset like any other pre-1985 asset.

Should I sell before 1 July 2027?
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Not because of the discount. Treasury’s own explanation is that the change gives no reason to buy or sell before that date, because the pre-2027 growth is protected either way. Selling early brings the tax forward and adds transaction costs. And if you sell a rental you already own and buy another established home, the new one does not keep the old one’s grandfathered negative gearing (see negative gearing).

What you do need
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You need a figure for the value at 30 June 2027, because it decides how much of your gain gets the discount. You can use a market valuation as at that date, or Treasury’s apportioning formula, which is still only a draft. See valuation or the free formula.

Is the 50% CGT discount being abolished?
No. For individuals and trusts it is replaced for gains made after 1 July 2027. Gains made up to 30 June 2027 keep the 50% discount, whenever the asset is sold. New builds keep it on later gains too, and super funds keep their own one-third discount; an asset a fund bought before 20 September 1985 gets the reset like any other pre-1985 asset.
If I sell in 2030, do I lose the discount?
Not on the growth up to 30 June 2027. That part keeps the 50% discount. Only the growth after 1 July 2027 is taxed under the new rules, with an indexed cost base and a minimum 30% rate for resident individuals.
Do I have to pay tax on 30 June 2027?
No. The deemed sale at 30 June 2027 is only a way to measure the split. The gain from it is set aside until you actually sell.

Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49 of 2026), ss 112-155, 112-160 and 112-165; Treasury, “Tax explainers: negative gearing and capital gains tax”. General information, not tax advice. Speak with a registered tax professional before acting.