CGT Impact Calculator — 2026-27 Budget
✓ Confirmed 12 May 2026: The 50% CGT discount will be replaced with inflation indexation plus a 30% minimum tax on gains for assets bought from 1 July 2027. Assets bought before that date keep the 50% discount. New builds can choose between both systems. Use the CONFIRMED: Inflation Indexation + 30% Min Tax preset to model the confirmed change.
Your Asset & Gain
| Item | Current (50%) | Scenario | Difference |
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Understanding the CGT discount debate
What the current 50% discount does
Since September 1999, Australian residents who hold a capital asset (property, shares, cryptocurrency, etc.) for more than 12 months before selling receive a 50% discount on their taxable capital gain. If you make a $300,000 gain on a property, only $150,000 is included in your assessable income and taxed at your marginal rate.
This is a significant concession — it effectively halves the CGT rate for long-term investors. A person on a 47% marginal rate only pays 23.5% of the gain in tax after the discount.
Why it's been debated
Critics of the 50% discount argue it disproportionately benefits wealthier Australians who hold larger investment portfolios, encourages over-investment in housing relative to productive assets, and contributes to housing affordability issues by inflating demand from investors.
Supporters argue it compensates for the effect of inflation eroding real returns (the old indexation method), encourages long-term investment, and that removing it would trigger a wave of asset sales as investors reposition — potentially crashing values and reducing tax revenue short-term.
What was confirmed — Budget night, 12 May 2026
Treasurer Chalmers confirmed on Budget night that the 50% CGT discount will be replaced with an inflation indexation model for assets purchased from 1 July 2027. A 30% minimum tax floor applies to gains under the new model. Assets purchased before 1 July 2027 are grandfathered and keep the 50% discount permanently.
New builds are exempt: Investors who buy a new residential build from 1 July 2027 can choose whichever method produces the lower tax outcome — the new inflation indexation model or the existing 50% discount. The calculator's Inflation Indexation + 30% Min Tax preset and the "Is this a new build?" toggle model both scenarios.
Negative gearing interaction
Negative gearing (deducting property losses against other income) and the CGT discount work together to make investment property particularly tax-effective in Australia. If the CGT discount were reduced, many property investors might shift their calculus — negative gearing allows losses to reduce income tax now, while the CGT discount reduces tax at the point of sale. Some economists argue the two policies should be considered together in any reform.
Frequently asked questions
Has the CGT discount changed in the 2026 Budget?
Yes — confirmed on Budget night, 12 May 2026. The 50% CGT discount will be replaced with inflation indexation plus a 30% minimum tax on gains for assets purchased from 1 July 2027. Assets purchased before that date keep the 50% discount permanently. New builds can choose whichever method produces the lower tax. Use the Inflation Indexation + 30% Min Tax preset above to model the confirmed change.
Does the CGT discount apply to shares and crypto?
Yes — the 50% discount applies to all capital assets held by Australian residents for more than 12 months, including listed shares, ETFs, cryptocurrency, managed funds, and investment properties. It does not apply to assets held in a company name, foreign residents, or assets held for less than 12 months.
What's the CGT rate without the discount?
Capital gains are taxed at your marginal income tax rate (plus Medicare Levy). There is no separate CGT rate — the gain is simply added to your other income. Without the 50% discount, a $300,000 gain on top of a $95,000 salary would push a significant portion into the 45% + 2% Medicare bracket.
Can I use capital losses to offset CGT?
Yes. Capital losses from other asset disposals in the same tax year (or carried forward from prior years) can be offset against your capital gains before the 50% discount is applied. This can significantly reduce your CGT liability.
What happens to negative gearing if CGT changes?
Negative gearing (deducting rental losses against your salary income) is a separate provision and would not automatically change if the CGT discount was reduced. However, many investor decisions consider both policies together — if the CGT exit tax increases, the expected return from negative gearing strategies changes.