Capital Gains Tax is Changing on 1 July 2027. Why Your Property’s Value on That Day Matters

Recently we’ve had several clients ask us: “Should I get my investment property valued now, before the CGT changes?” The short answer is not yet. Getting a valuation of your property as at 1 July 2027 could be worth tens of thousands of dollar, but you need to wait until we’re closer June 2027. 

1. A quick refresher on what is changing

The May 2026 Federal Budget announced two changes for residential property investors, both starting on 1 July 2027.

• Negative gearing. Established properties bought after Budget night (7:30pm, 12 May 2026) will no longer be able to offset rental losses against wages. Losses carry forward against future property income instead. Properties owned before Budget night keep the current rules, and new builds are exempt.
• The capital gains tax discount. The flat 50% CGT discount is being replaced with an inflation adjustment. Your cost base is indexed for inflation and you pay tax on the “real” gain above that, at your marginal rate, subject to a new minimum rate of 30%. This applies to individuals, trusts and partnerships. Superannuation funds are not expected to change, and the family home stays exempt.

Importantly, the CGT change only applies to gains that accrue from 1 July 2027 onward. Everything you have made up to that date is protected under the old rules. That protection is the reason the valuation of your property as of 1 July 2027 matters.

2. What it means if you already own an investment property

If you own a property today and sell it after 1 July 2027, your capital gain is split into two parts:

• The gain from your purchase price up to the property’s market value on 1 July 2027. This part gets the existing 50% discount, no matter when you eventually sell.
• The gain from the 1 July 2027 value up to your sale price. This part is taxed under the new rules: indexed for inflation, then taxed at your marginal rate with a 30% floor.

Treasury has said owners who do not obtain a valuation will be able to use an apportionment formula that spreads the total gain evenly across the years of ownership. That is the fallback, and for many owners it will understate the value, which could mean more tax. We come back to this below.

3. How CGT will be calculated after 1 July 2027: two worked examples

Example 1: the mechanics. You bought an investment property in 2015 for $600,000. A registered valuer puts its market value at $1,000,000 as at 1 July 2027. You sell in July 2030 for $1,150,000. Inflation runs at 3% a year and Sarah’s marginal tax rate is 37%.

Example 2: the same property, a lower 2027 value. Now suppose a client does not get a valuation at 1 July 2027. The apportionment formula spreads the gain evenly across 15 years of ownership and lands on $900,000 for 1 July 2027 instead of the $1,000,000 a valuer would have supported.

4. What you need to do, and when

Get a valuation as at 1 July 2027 from a registered valuer. This is the part that has caught some clients out. The valuation has to state the market value of your property on 1 July 2027, so a report written today cannot do that, especially with values moving. Valuers can inspect in the weeks either side of the date and issue a report “as at 1 July 2027”. Retrospective valuations are accepted, but reports prepared within three or four months of the date are far more defensible.

A few practical points:

• It needs to be a full inspection report from a Certified Practising Valuer. An agent appraisal, bank desktop valuation or online estimate will not meet the ATO’s standard, and a professional valuation protects you from penalties if it is later found wanting.
• Keep your records now. Purchase contract, stamp duty, legal fees and receipts for capital improvements all form part of your cost base whichever method you use.

We are assembling a panel of registered valuers and will share it with clients in early 2027 with a booking process ahead of the June inspection window.

5. Why a higher 2027 valuation is good news for most owners

It can feel odd to hope for a high valuation on a property for tax purposes, but for the CGT transition that is exactly what you want, within the bounds of genuine market value:

• Gains up to 1 July 2027 get the 50% discount. Gains after it are taxed in full on the real amount, with a 30% floor. A higher 2027 value shifts more of your lifetime gain into the discounted bucket.
• For pre-1985 properties it is even simpler. Everything up to the 2027 value is tax free forever. The higher the supportable value, the more of your gain never gets taxed at all.
• A valuation captures what a formula cannot: for most properties bought before 2020 that will understate the 2027 value. Importantly, having a valuation allows you to pick the most favourable approach when you eventually sell.

The caveat is that the valuation must be genuine and supportable: comparable sales, a clear methodology and an independent valuer. An inflated figure invites challenge, and if you later sell for less than the 2027 value the treatment of that shortfall is still to be legislated. The goal is a well-evidenced number at the top of the defensible range, which is exactly what a registered valuer with good instructions delivers.

So for now, do not rush out for a valuation this year, but do get organised. Gather your records, talk to your accountant about your own position, and make sure you are on our list for the panel when it opens in early 2027.

The information in this article should be treated as general information only, not tax or financial advice. Speak to a registered tax agent about how the changes apply to you.

Further please note that the legislation has not yet passed Parliament and the detail could still move, including the exact indexation method and the transitional rules. This article reflects the Budget announcement and Treasury and ATO guidance available in September 2026.