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Australiam property investors urged to secure records ahead of 30 June 2027 CGT valuation date

Sydney Property Valuers Metro

Key Facts:

•      From 1 July 2027, cost-base indexation and a 30% minimum tax replace the 50% CGT discount for eligible gains accruing from that date.

•      Investment properties held across the change are treated as sold and reacquired at their value immediately before 1 July 2027.

•      Valuations for that date cannot be obtained in advance, but owners can gather evidence now.

Sydney, NSW – 13 November 2026 – Sydney Property Valuers Metro is urging investment property owners to start gathering the records they will need to establish their property’s value at the end of 30 June 2027, when capital gains tax (CGT) changes take effect.

In guidance published on 19 October, the Australian Taxation Office (ATO) said owners do not need a valuation in place on that date and should not obtain one beforehand, because a valuation cannot be forward-looking. However, photographs, plans and renovation records showing the property’s condition are easiest to collect now.

The core reforms were enacted through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and associated tax-rate legislation, which received Royal Assent on 26 June 2026. Further legislation and supporting instruments are still being finalised.

What changes from 1 July 2027

For eligible Australian-resident individuals, including certain gains flowing through trusts and partnerships, gains accruing from 1 July 2027 will be calculated using cost-base indexation instead of the 50% discount. Indexation adjusts eligible costs for inflation using statutory CPI figures and, like the discount, requires a 12-month holding period. Companies and superannuation funds are treated differently.

A 30% minimum tax will also apply to individuals’ relevant net capital gains. It is not an extra 30% on top of ordinary tax, nor a tax on the sale price. Recipients of specified income-support payments, including the Age Pension and JobSeeker, are exempt from the minimum tax if they meet the payment requirements in the relevant income year, although ordinary CGT may still apply.

Investors in qualifying new residential dwellings can choose to keep the 50% discount. A new build or recent purchase does not automatically qualify, so owners should confirm the dwelling definition and election requirements with their tax adviser.

How existing investments are treated

Eligible gains accrued before 1 July 2027 keep the existing discount treatment. Pre-CGT assets, acquired before 20 September 1985, remain exempt for gains accrued before that date, and the main residence exemption is unchanged.

To separate the two periods, the law treats affected assets as sold immediately before 1 July 2027 and reacquired on 1 July 2027. Under the market value method, the property’s value at that moment becomes the dividing line. The earlier gain or loss is deferred and only reported when the property is sold or another CGT event occurs.

In a simplified example, a property bought for $800,000, worth $950,000 immediately before 1 July 2027 and later sold for $1.1 million has $150,000 of growth on each side of the transition. These are not final taxable gains: costs, indexation, losses and exemptions all affect the calculation.

The Government is also developing an alternative apportionment method, released in draft in August 2026, which would use a formula to estimate the transition value instead of a valuation. Not every property will need a professional valuation, so owners should confirm the right method with their tax adviser.

Why the property’s condition on the day matters

A valuation must reflect the property as it stood on that date. Consider a two-bedroom house at 30 June 2027 that is extended to four bedrooms the following year. A later inspection shows the enlarged home, but the assessment must reflect its original layout, condition and accommodation.

“The first question is which date the accountant needs assessed,” said Jack Peterson, Property Expert at Sydney Property Valuers Metro. “The valuer can then establish what the property contained at that time and examine the relevant sales evidence.”

Dated photographs, plans and completion records help establish that distinction. The valuer supplies the property evidence; the accountant or registered tax agent determines how it is used in the CGT calculation.

What owners can do now

• Confirm with a tax adviser how the changes affect their property and ownership structure.
• Keep purchase contracts, renovation invoices, plans, dated photographs and earlier property valuation reports.
• Record the property’s condition close to 30 June 2027, particularly if works are planned.
• Check whether any exemptions or elections apply before making decisions.
• If a valuation is needed, arrange it on or after 1 July 2027, specifying the valuation date as immediately before 1 July 2027.

The ATO will publish further guidance on valuations and record-keeping before the changes start. See the ATO capital gains tax reform page.

ENDS

About us:

About Sydney Property Valuers Metro

Sydney Property Valuers Metro provides independent residential and commercial property valuations across Sydney, including capital gains tax and retrospective valuations. The firm also provides business and plant and equipment valuations. More information is available at sydneypropertyvaluation.com.au.

Contact details:

Jack Peterson, Property Expert

Sydney Property Valuers Metro

Phone: (02) 8599 9840

Email: [email protected]