Budget 2026–27 CGT Changes: What Happens If You Bought Your Investment Property Before 12 May 2026?
21 Jul 2026
9 minutes
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Capital gains tax on an investment property now depends on two things: whether you bought it before or after the Budget date - 12 May 2026 - and whether it's a new build or an existing home.
Every investment property fits into exactly one of three buckets. Each bucket gives you a choice between Option 1 and Option 2.
| Bucket | When you bought it | Option 1 | Option 2 |
|---|---|---|---|
| A - Bought before the Budget | On or before 12 May 2026 | With a certified valuation: 50% discount on gains up to 30 June 2027. Gains after that date use indexation instead - your cost base grows with inflation, rather than a flat discount. | Without a certified valuation: the ATO splits the gain by time instead, using its own default method. |
| B - New build, bought after the Budget | After 12 May 2026, brand-new home, never lived in before | 50% discount on the whole gain. | Indexation of your costs instead. |
| C - Existing home, bought after the Budget | After 12 May 2026, second-hand home | Indexation of your costs - the only method available. | Not applicable - there's no second option for this bucket. |
This guide focuses on Bucket A - most properties in Australia sit here today.
Most properties sit in this bucket today. Buy on or before 12 May 2026, and part of your gain still gets the 50% discount.
There's one new date to remember: 30 June 2027.
If you owned the property before the Budget, get a certified valuation of what the property was worth on 30 June 2027.
No valuation? The ATO uses its own default method instead - it splits your gain based on time, not on when the value actually grew. That's your only option.
| Bought for | $300,000 | Bought in | 2019 |
|---|---|---|---|
| Value on 30 June 2027 (certified valuation) | $900,000 | Tax rate used | 47% (top marginal rate) |
| Sold for | $1,000,000 | Sold in | 2030 |
Total gain before any adjustment: $700,000.
| With a certified valuation | Without one (ATO default) | |
|---|---|---|
| How the split works | Valuer confirms the property was worth $900,000 on 30 June 2027 | ATO splits by time: 8 of the 11 years owned were before 30 June 2027 |
| Gain before 30 June 2027 | $600,000 | $509,100 |
| Taxable gain before 30 June 2027 (50% discount) | $300,000 | $254,550 |
| Taxable gain after 30 June 2027 (indexation applied) | $16,550 | $115,900 |
| Tax owed at 47% | $148,800 | $174,100 |
With a valuation, this investor calculated both methods and used the valuation-based result, since $148,800 is lower than the ATO's default of $174,100.
Without a valuation, only the default method would have been available - $25,300 extra tax, on the same property, same sale price, same total gain.
The size and direction of this gap depend on the purchase price, the CPI over the holding period, how long the property was held, and where the value really grew.
There's no set answer - you can't know which method is lower until you've run the numbers for that specific property.
| DO | DON'T |
|---|---|
| ✓ Get a certified, in-person valuation as at 30 June 2027 - desktop valuations generally don't give the best value. | ✗ Assume the 50% discount still covers the whole gain after 30 June 2027. |
| ✓ Keep that valuation with your original purchase contract - it's now a permanent cost-base record. | ✗ Confuse the valuation date with when it was obtained - it must value the property as it stood on 30 June 2027. |
| ✓ Calculate the tax both ways once you have a valuation, and use whichever is better for you. | ✗ Assume a valuation is the only option once you have one - the ATO's default is still available and may occasionally be lower. |
| ✓ If you also renovate after 12 May 2026, track that cost separately, with its own start quarter. | ✗ Combine a renovation's cost with the main valuation split - they're worked out separately. |
| ✓ Confirm the valuer values the property "as at" 30 June 2027, not the date they actually visit. | ✗ Move this property into Bucket B or C - the purchase date alone keeps it in Bucket A. |
Getting this right is genuinely risky on the old spreadsheet model - it's simply not built for this.
Get it wrong, and the end result is the same: a lower cost base, and more tax than you actually owe.
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Book a Demo - with FounderIf you bought your investment property on or before 12 May 2026, it's in Bucket A, regardless of whether it's a new build or an existing home. The purchase date is the only thing that matters here; renovating the property after 12 May 2026 doesn't move it into Bucket B or C.
