Labor overhauls capital gains tax discount from 1 July 2027 — Australian Federal Budget
Labor's australian federal budget change to the capital gains tax discount will replace the current discount with a new cost-base indexation system from 1 July 2027. The family home will still be exempt from CGT under the new scheme, and people who bought before that date but sell after it will need to work through both sets of rules.
The change is one of the biggest items in the budget, and the article uses Jan, a hypothetical property investor, to show how the rules could apply to a $1 million house. The interactive calculator compares an asset wholly under the old scheme with one wholly under the new scheme.
Jan and the 30% rate
For Jan, the key issue is how a sale is taxed once the discount is replaced. The article says the calculator was not correctly applying the new minimum 30% tax rate on capital gains in some scenarios, but that issue has now been fixed.
That correction matters because the calculator is meant to show the difference between selling an asset under the old policy and selling under the new one. It also shows that the outcome changes depending on asset price growth, inflation and other parameters.
1 July 2027 rules
From 1 July 2027, the CGT discount will be replaced with the new cost-base indexation system. The article's timeline also notes that owners have had a CGT discount since 1999, giving the new rule a clear break point for anyone holding an asset across the change.
For people with assets acquired before 1 July 2027, the practical step is to calculate the gain using both the old and new rules if the sale happens after the start date. The family home remains outside the tax change, so the policy is aimed at assets that do fall within CGT.
20 May 2026 amendment
The article was amended on 20 May 2026, when the calculator issue was fixed. That leaves the budget change itself intact, but it also means anyone checking the figures now is seeing the corrected 30% rate treatment rather than the earlier error.
For readers deciding whether the new rules are relevant, the dividing line is simple: assets sold before 1 July 2027 stay under the old discount, while sales after that date move to the new indexation system. Jan's example shows why the sale date, not just the purchase date, is now the number to watch.
