Guides · Tax & rules · Updated 2026-07-13
CGT Changes from 1 July 2027: What Replaces the 50% Discount?
The 2026–27 Federal Budget, handed down on 12 May 2026, rewrote two pillars of Australian property taxation at once. The negative gearing changes are covered in their own guide; this one deals with the capital gains tax reform — the change that bears most directly on what an investor keeps at the end of a hold. From 1 July 2027, the flat 50% CGT discount is replaced by indexation-based treatment with an effective minimum of 30%.
Which rules apply to a given property is not a matter of opinion — it turns on when the property was bought or contracted, and whether it is a new build. That creates three distinct classes of property, each with its own tax treatment. This guide covers what changes on 1 July 2027, who keeps the old rules, and where the cost base — stamp duty included — fits in.
What changes to CGT on 1 July 2027
Under the outgoing rules, an eligible capital gain is simply halved before tax — the flat 50% discount. From 1 July 2027, that flat discount is gone. In its place is indexation-based treatment, with an effective minimum of 30%. Instead of one fixed haircut applied to every eligible gain, the concession is worked out on an indexation basis, with the 30% figure operating as the effective floor.
The practical consequence is that the concession is no longer a single number you can pencil in for every deal. The treatment a property receives now depends on its class — which is where the grandfathering rules come in.
Grandfathering and the new-build concession: three property classes
The Budget draws a hard line at 12 May 2026, and it splits the market into three classes:
- —Grandfathered — properties owned or contracted before 12 May 2026. The old rules keep applying, including the flat 50% CGT discount. Nothing changes for these holdings.
- —New builds — purchased or contracted from 12 May 2026 onward. New builds retain concessional CGT treatment under the new regime, and among post-budget purchases they are the only class where rental losses remain deductible against salary.
- —Established post-budget — established properties bought after 12 May 2026. These face the full new regime: indexation-based CGT treatment with the 30% effective minimum, and rental losses quarantined against future rental profits or the eventual capital gain rather than deductible against other income.
The cost base: where stamp duty actually goes
Whatever regime applies, capital gains tax is calculated on the gain — the difference between what the property sells for and its cost base. That makes the cost base central to any CGT calculation, and it is easy to miscount.
Stamp duty is the big one. It is a capital acquisition cost: it is not deductible against income in the year it is paid, but it is added to the CGT cost base. A cost base that includes stamp duty is larger, which means a smaller assessable gain when the property is eventually sold. Land tax works the other way — on an investment property it is generally deductible year by year.
One boundary worth stating plainly: your principal place of residence is generally exempt from CGT and land tax. The changes covered in this guide are an investment-property matter.
How Plintha models the 2027 CGT changes
Plintha classifies every property it analyses as grandfathered, new build, or established post-budget, and the class changes the tax modelling — the same analysis produces different after-tax numbers depending on which side of 12 May 2026 the deal sits and what kind of stock it is.
The cost base inputs are handled with the same discipline. Stamp duty is computed exactly for all 8 states and territories, verified against each revenue office, rather than approximated. Every figure in a report carries provenance — computed, [ESTIMATE] with the assumption shown, or [ASSUMED] from an overridable default — so you can see exactly what the CGT position rests on. Each analysis returns a verdict of Meets Criteria, Conditional, or Below Criteria with a 0–100 score, assessed through both a Yield and a Growth lens. The free tier includes one analysis per month, with no card required.
Common questions
Do the 2027 CGT changes apply to a property I already own?+
Only if it was purchased or contracted on or after 12 May 2026. Properties owned or contracted before that date are grandfathered — the old rules, including the flat 50% CGT discount, keep applying to them. Properties acquired from 12 May 2026 onward come under the new indexation-based treatment when it takes effect on 1 July 2027, with new builds retaining concessional treatment.
What replaces the 50% CGT discount from 1 July 2027?+
Indexation-based treatment with an effective minimum of 30%. The flat halving of eligible gains ends; the concession is instead worked out on an indexation basis with 30% as the effective floor. New builds retain concessional treatment, and grandfathered holdings keep the old rules entirely.
Is stamp duty tax deductible on an investment property?+
Not annually. Stamp duty is a capital acquisition cost — it is added to the CGT cost base, which reduces the assessable gain when you sell. Land tax on an investment property, by contrast, is generally deductible year by year.
Is my own home affected by the CGT changes?+
Generally not. Your principal place of residence is generally exempt from CGT and land tax. Within property, the 1 July 2027 changes affect investment holdings, and even then only those purchased or contracted from 12 May 2026 onward — anything owned or contracted before that date is grandfathered.
Run the numbers on a real property.
Paste any listing and Plintha computes the exact duty, the after-tax cashflow under the 2026–27 rules, and a verdict — free, no card, no sign-up.
Analyse a property — freeThis guide is general information, not financial, tax, credit or legal advice — it doesn't consider your objectives, financial situation or needs. Figures are computed at the rates current as of the date shown and can change. Confirm decisions with licensed professionals.