Own an Investment Property or Shares? The Capital Gains Rules Are Changing

Own an investment property or shares? The capital gains rules are changing 

If you own an investment property, a share portfolio, or anything else you've held for more than twelve months, you've probably relied on the 50% capital gains tax discount without giving it much thought. 

That discount is changing. 

The 2026-27 Federal Budget replaced it with a concession linked to inflation, alongside a minimum 30% tax rate on capital gains. The new arrangements are due to apply from 1 July 2027. 

What's changing 

Until now, if you held an asset for at least twelve months, half of any capital gain was effectively taken out of your assessable income. 

Under the new approach, the flat 50% discount is replaced with a concession that adjusts for inflation instead, and a minimum tax rate of 30% applies to the gain. 

The intention behind it is to tax the real increase in an asset's value rather than the part that's simply inflation. In practice, whether you end up better or worse off depends heavily on how long you've held the asset and how much it has grown. 

It's not just property 

This is where a lot of people get caught out. 

The changes apply to capital gains generally, not only to investment properties. That includes: 

Your family home remains exempt, as it always has been. 

Who Isn't Affected 

Two important exclusions are worth knowing. 

First, existing investments are grandfathered. After considerable debate through June, the government agreed to preserve the current capital gains and negative gearing concessions for assets already held. If you bought before the changes take effect, your position is protected. 

Second, pensioners and people receiving income support are not subject to the revised 30% arrangement. 

What This Means for Your Decisions 

The temptation with any announced tax change is to react quickly. That's rarely the right instinct. 

Selling an asset purely to get ahead of a rule change can create a tax bill you didn't need to trigger, and it can cost you more than the change itself would have. 

The better question is whether the change alters your plans at all. For many people holding assets bought years ago, it won't. For someone weighing up a new investment purchase in the next twelve months, it might change the numbers considerably. 

What to Do Now 

Know your purchase dates. Grandfathering makes the acquisition date of every asset you hold genuinely important. It's worth having that documented properly. 

Check your cost base records. Improvements, purchase costs and holding costs all affect the final calculation. Gaps in your records cost you money at sale time. 

Model it before you act. If you're considering a sale in the next couple of years, it's worth running the numbers under both sets of rules before you decide on timing. 

Revisit new purchases carefully. If you're planning to buy an investment property or add to a portfolio, the after-tax picture looks different from here.