Should I Sell My Investment Property Before The CGT Changes On 1 July 2027?

If you own an investment property, the capital gains tax changes starting on 1 July 2027 do not automatically mean you should sell before that date. The reforms are prospective, which means gains that build up before 1 July 2027 remain under the existing rules. For many investors, the better question is whether selling still makes sense once tax, property performance, costs and personal plans are considered together.

What is changing with capital gains tax on 1 July 2027?

From 1 July 2027, the current 50 per cent CGT discount for eligible individuals, trusts and partnerships will generally be replaced by cost base indexation for gains that accrue from that date. Indexation adjusts the relevant cost base for inflation, so the new system is designed to tax the real gain rather than the inflation component.

A minimum tax rate of 30 per cent will also apply to relevant capital gains under the new arrangements, subject to the rules and exemptions that apply to the taxpayer and asset.

The important point for existing investors is that the change is prospective. The portion of a capital gain that accrued before 1 July 2027 can retain access to the existing 50 per cent CGT discount, while the portion accruing from 1 July 2027 falls under the new rules.

Why might selling before 1 July 2027 be unnecessary?

Selling purely because the tax rules are changing can overlook the way the transitional arrangements work. An investor who continues to hold a property after 1 July 2027 does not simply lose the existing treatment on all of the growth that occurred before that date.

That matters because a property decision is broader than CGT alone. Selling can involve agent fees, marketing expenses, conveyancing costs and the loss of future rental income or potential capital growth. There may also be tax consequences from realising a gain in a particular financial year.

For some owners, selling before the change may still suit their circumstances. For others, bringing forward a sale solely to avoid the new CGT regime could mean making a major investment decision for a tax reason that applies only to future gains.

How will a future sale be treated if I keep the property?

For an investment held across 1 July 2027, the tax treatment effectively needs to distinguish between the gain accrued before that date and the gain accrued afterwards.

The pre-1 July 2027 component can continue to receive the existing CGT discount where the eligibility requirements are met. The post-1 July 2027 component is subject to the new framework, including indexation and the minimum tax rules.

This is why keeping good records will become particularly important. The value attributed to the property around the transition date and the method required under the tax rules can affect how a later gain is calculated. A qualified tax adviser can explain the record-keeping and valuation evidence appropriate to your circumstances.

What about negative gearing on an existing investment property?

The negative gearing changes are separate from the CGT reforms. The new rules limit negative gearing for residential property to new builds from 1 July 2027, but existing investment decisions made before 7:30 pm AEST on 12 May 2026 are grandfathered.

If you already owned an investment property before that cut-off, the Government has stated that the existing negative gearing arrangements for that investment remain unchanged. That is another reason not to assume 1 July 2027 creates a general requirement to sell an existing investment property.

What should I consider before deciding whether to sell?

Rather than treating the reform date as the decision itself, it can help to work through the reasons you own the property and what you want the investment to achieve.

• Your original investment plan: Has your reason for owning the property changed?
• The property’s performance: Consider rental income, ongoing expenses and the property’s role in your broader investment strategy.
• Your expected holding period: A decision may look different if you were already planning to sell soon compared with holding for many years.
• The cost of selling: Allow for transaction costs as well as the tax consequences of realising a gain.
• Your personal tax position: The effect of CGT depends on your circumstances, so modelling the alternatives with a qualified tax adviser can be useful before acting.

Could selling before 1 July 2027 still make sense?

Yes. If you were already considering selling, the tax changes may be one factor worth modelling. Your expected sale price, cost base, ownership period, taxable income, transaction costs and plans for the proceeds can all influence the result.

There is no single answer that applies to every investor. The practical point is to compare the after-tax outcome of selling before the reforms with the likely outcome of continuing to hold, while also considering the non-tax reasons for each option.

Common questions

Will I lose the 50 per cent CGT discount on all my existing gain after 1 July 2027?

No. Under the new rules, eligible gains accrued before 1 July 2027 retain the existing CGT discount treatment. The new arrangements apply to gains accruing from 1 July 2027.

Does the new 30 per cent minimum tax apply to my entire historical gain?

Not simply because you sell after 1 July 2027. The reforms are prospective, with the new treatment applying to the relevant gain accruing from 1 July 2027.

Should I get my investment property valued before the rules change?

Accurate records around the transition will be important, but the appropriate valuation and calculation method depends on the legislation and your circumstances. Ask your tax adviser what evidence you should obtain and retain before 1 July 2027.

Is this the same as the negative gearing change?

No. CGT and negative gearing are separate parts of the reforms. Existing residential investments made before 7:30 pm AEST on 12 May 2026 are grandfathered under the negative gearing changes.

Before you make a decision

The 1 July 2027 CGT changes are significant, but they are not, by themselves, a reason every investor should sell. Because pre-reform gains retain their existing treatment and the new regime applies prospectively, the decision should start with your investment objectives and personal circumstances.

If selling is already on your mind, we can help you understand the property side of the decision, including preparing for a sale and discussing the practical considerations involved. For the tax consequences, speak with a qualified tax adviser or accountant who can model the options using your actual figures.

This article provides general information only and is not legal advice. Requirements can change, so consider obtaining advice that reflects your circumstances.

Sources

Australian Treasury: Budget 2026–27 tax system changes

Parliament of Australia: Treasury Laws Amendment (Tax Reform No. 1) Bill 2026

Parliamentary Library: Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 Bills Digest