How the May 2026 Budget Changes CGT for Property Investors

The federal budget introduced significant changes to capital gains tax treatment for investment properties, marking the most substantial reform to CGT rules in over two decades.

What's changing

From July 1, 2026, property investors will have the option to use cost-base indexation instead of the current 50% CGT discount. This means your purchase price will be adjusted for inflation before calculating the capital gain.

Who benefits

Investors who have held properties for at least 12 months may see lower tax bills under the new indexation method, particularly in high-inflation environments.

The 30% minimum tax rate

The 30% minimum tax rate applies only to individuals with taxable income over $500,000. If your income is below this threshold, you continue to benefit from the full indexation method without the minimum tax rate.

Broader impact

These changes apply to all capital assets (including shares, property, and other investments), not just investment properties.

What you should do

If you're planning to sell an investment property, it's worth running the numbers under both the current and new rules. Use our CGT Calculator to compare the tax payable under both scenarios before making your decision.

For properties you're considering selling before July 1, 2026, the current 50% discount may still be more favorable, especially if you're in a lower tax bracket.