The 2026 Budget’s CGT Shake-Up: What It Could Mean When You Sell

Of all the measures in the 2026–27 Federal Budget, the proposed overhaul of capital gains tax is the one most likely to change the numbers on a property or share sale — and it has caught a lot of investors off guard. The familiar 50% CGT discount would go, replaced by an entirely different way of working out the gain. If you own an investment property, a share portfolio or any other asset you might one day sell, it pays to understand what is being proposed and how the timing could affect you. This guide from Trinity Accounting Practice walks through the changes in plain English.

What’s changing — in plain English

At the moment, if you hold an asset for more than 12 months, you only pay tax on half the gain. That 50% discount is the cornerstone of how most investors plan a sale. Under the proposal, it would be replaced by two new mechanisms working together:

• Cost-base indexation. Instead of halving the gain, your original purchase cost would be lifted by inflation over the years you owned the asset. This reduces the “paper” gain caused purely by rising prices, so you are taxed closer to your real gain.
• A 30% minimum tax rate on the real gain. On top of indexation, a floor of 30% would apply to the indexed gain — meaning the gain could not be taxed at less than 30%, regardless of your other income.

The combined effect matters. Today, the top effective CGT rate sits at around 23.5% once the discount is applied. Under the proposal, the effective rate on a large gain could climb toward 47%, with the 30% floor as the starting point. For some assets indexation will soften the blow; for others — particularly those bought recently or in low-inflation periods — the loss of the 50% discount will outweigh it.

The proposed start date is for sales on or after 1 July 2027. Assets sold before that date would still fall under the current rules.

A worked example

Consider an investor on a $120,000 salary who bought an investment property ten years ago for $400,000 and sells it for $750,000 — a headline gain of $350,000.

• Today (50% discount): the $350,000 gain is halved to roughly $176,000 of taxable gain, producing around $75,600 in tax on the sale.
• Proposed (indexation + 30% floor): the $400,000 cost base is indexed up to about $512,000 for inflation, leaving a real gain of roughly $238,000. Taxed with the 30% floor applied, that produces around $105,000 in tax.

That is roughly $30,000 more tax on exactly the same sale — purely because of how the gain is calculated. The gap will be smaller for assets held through high-inflation periods (where indexation does more work) and larger for shorter holds.

What’s not changing

It is just as important to know what the proposal leaves alone:

• The main residence exemption stays. Your family home remains exempt from CGT — this measure does not touch it.
• Small business CGT concessions are retained. The valuable concessions that help business owners on sale or retirement are proposed to continue.
• Small and start-up business treatment is still under consultation. How these changes interact with small and early-stage businesses has not been finalised, so watch this space.

What to do now — plan, don’t panic

Nothing has changed yet, and it may still change again before it becomes law. The worst response is a rushed sale based on a headline. The sensible response is to understand your own position so you can act calmly if and when the rules are confirmed.

The single biggest lever here is timing relative to 1 July 2027. If you were already contemplating a sale, the difference between settling before or after that date could be tens of thousands of dollars on a substantial asset. Equally, a forced or premature sale can cost more than the tax it saves. This is exactly the kind of decision worth modelling properly — with your real numbers, your income and your holding period — rather than guessing.

How Trinity can help

At Trinity Accounting Practice we are watching this proposal closely as it moves through the legislative process. When you sell a major asset, the CGT outcome is rarely just about one rule — it ties into your income for the year, your ownership structure, timing, and your broader plans. We help clients model the scenarios, weigh up the timing, and make a clear-headed decision rather than a reactive one. For wider context, see our overview of the 2026–27 Federal Budget.

Talk to Trinity about your CGT position →

General advice only. This article contains general information current as at June 2026 and does not constitute tax, financial or legal advice. It does not take into account your personal circumstances, objectives or needs. Before acting on any information in this article, you should consider its appropriateness to your situation and seek professional advice from Trinity Accounting Practice or another qualified adviser. Liability limited by a scheme approved under Professional Standards Legislation.