what are the new CGT rules just passed in federal parliament?
The new CGT rules passed in federal parliament replace the 50% CGT discount for individuals, trusts and partnerships with cost-base indexation and a 30% minimum tax on capital gains, starting from 1 July 2027. They also keep the CGT discount for small businesses under the stated threshold and preserve the discount for new housing-related cases.
What changed
- The 50% CGT discount is being removed for most individuals, trusts and partnerships.
- Capital gains will instead use cost-base indexation plus a minimum 30% tax rate.
- The changes apply to gains accruing on and after 1 July 2027, including some gains on pre-CGT assets.
Main carve-outs
- Businesses earning less than $10 million a year still keep the 50% CGT discount.
- The CGT discount still applies for new housing.
- Existing small-business CGT concessions are retained.
Related tax measures
- The same legislation also restricts negative gearing for established properties, with transitional rules for homes bought or contracted before 7:30pm AEST on 12 May 2026.
- It also introduces a $250 Working Australian Tax Offset from 1 July 2027 and a $1,000 standard deduction for work-related expenses in 2026-27.
Why it matters
For property investors and many asset sellers, this is a significant shift because the long-standing CGT discount is no longer the default treatment for future gains. The practical effect is that tax on future gains should be higher for many people, although some business and housing categories are protected.
| Measure | New rule |
|---|---|
| Standard CGT discount | Replaced for most individuals, trusts and partnerships by cost-base indexation plus a 30% minimum tax rate |
| Start date | Applies to gains accruing from 1 July 2027 |
| Small business | 50% CGT discount retained for businesses under $10 million revenue |
| New housing | Discount still applies in specified housing cases |
