The 2026-27 Federal Budget replaces Australia's 50% CGT discount with cost base indexation plus a 30% minimum tax on the net capital gain, from 1 July 2027. This calculator runs both regimes side-by-side for the same property so you can see exactly which rules produce a better outcome — and how much money is on the table.
What this calculator answers
- Should I sell before 1 July 2027? If you owned the property on 12 May 2026 you're grandfathered, so the answer is rarely a hard yes — the comparator shows the actual delta for your numbers.
- Established vs new build acquisition under the new rules? New build owners can choose either regime at sale. The comparator tells them which.
- What does the 30% minimum tax floor mean for me? For SMSFs and low-bracket individuals, the floor is the most material part of the reform. The calculator surfaces this in the effective tax rate line.
The two regimes in one place
Current rules (grandfathered or pre-1 Jul 2027 sale)
Capital gain = capital proceeds − cost base
Discount = 50% (individual ≥ 12 months)
= 33⅓% (SMSF accumulation ≥ 12 months)
= 0% (company / held < 12 months)
Taxable gain = capital gain × (1 − discount)
Tax owed = taxable gain × marginal rate
New rules (from 1 Jul 2027, post-12 May 2026 acquisition)
Indexed cost base = cost base × (1 + inflation)^years
Indexed gain = capital proceeds − indexed cost base
Tax rate = max(marginal rate, 30%)
Tax owed = indexed gain × tax rate
The headline difference: under the old rules you knock off half the gain and then apply your marginal rate. Under the new rules you knock off inflation from the cost base and then apply your marginal rate — with a 30% floor so high-discount-low-rate combinations can't beat the system.
Worked comparison: $200,000 nominal gain, 7-year hold
A 37% marginal-rate investor sells an established property for $800,000 that was bought for $600,000 with $30,000 acquisition costs. Holding period 7 years. Inflation 3% per year.
| Element | Current rules (50% discount) | New rules (indexation + 30% min) |
|---|---|---|
| Cost base | $630,000 | $630,000 × (1.03)^7 = $774,790 |
| Capital proceeds | $775,000 | $775,000 |
| Gain to tax | $145,000 | $215 (real gain) |
| Discount | 50% | n/a |
| Taxable gain | $72,500 | $215 |
| Tax rate | 37% | max(37%, 30%) = 37% |
| Tax owed | $26,825 | $80 |
| After-tax proceeds | $748,175 | $774,920 |
In this scenario — long hold, modest nominal growth, average inflation — the new regime is dramatically cheaper. The 50% discount looked generous when capital growth was 8–10% per year; with 3% inflation eating most of a 3% real return, indexation wipes out the taxable gain.
Reverse the inputs (3-year hold, $1.2M sale price) and the answer flips: nominal growth races ahead of inflation, the 50% discount cleans up most of the gain, and the indexation regime taxes a real gain of ~$500,000 at 37% — a much larger bill.
Decision framework
Three questions decide it:
- Holding period. Longer = inflation has more time to erode the gain = indexation typically wins.
- Capital growth rate. Modest growth → indexation. Strong growth → 50% discount.
- Your marginal rate. Above 30% → no floor effect, your rate applies. Below 30% → the floor lifts you to 30%, which can be more than the effective 50%-discounted rate would have been.
The combination of slow growth and a long hold is the regime where indexation routinely wins by 60-80% of the tax bill. Strong growth and a short hold is the regime where the 50% discount wins by 40-60%. Most real-world property scenarios fall somewhere in between — which is exactly why the comparator is the right tool.
Why this calculator exists
The Budget changes were announced at 7:30pm AEST on 12 May 2026 — the moment of the Treasurer's speech. Anyone who contracted to buy an established residential investment property after that moment falls under the new rules when sold from 1 July 2027 onwards. For investors deciding whether to act now (lock in grandfathering by buying before the line) or wait, and for owners deciding whether to bring forward a sale or hold past 2027, this calculator gives the numerical answer that the news headlines don't.
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Frequently asked questions
What is the Budget 2026 CGT change?
In the 2026-27 Federal Budget (delivered 7:30pm AEST 12 May 2026), the Government announced that the 50% capital gains tax discount for assets held more than 12 months will be replaced from 1 July 2027 with cost base indexation plus a 30% minimum tax on the net capital gain. The change applies to individuals, trusts and superannuation funds. Assets owned on 12 May 2026 are grandfathered under the existing rules.
Who does the new CGT regime apply to?
Assets acquired from 7:30pm AEST 12 May 2026 onwards, sold on or after 1 July 2027. Owners of new builds purchased after that date can choose between the 50% discount and the new regime at sale. The main residence exemption is unchanged. Pre-12 May 2026 property and other CGT assets keep the 50% discount for life.
How does cost base indexation work?
Your purchase price plus acquisition costs is grossed up by the rate of inflation between purchase and sale. Only the real gain — the increase above inflation — is taxed. For example, a property bought for $630,000 and sold seven years later for $800,000 with 3% inflation has an indexed cost base of about $774,690 and a real gain of about $25,310. That real gain is then taxed at your marginal rate (or 30% minimum, whichever is higher).
What is the 30% minimum tax floor?
Under the new regime, the tax rate applied to the indexed capital gain cannot fall below 30%. For an individual on the 16% bracket, the floor lifts their effective CGT rate to 30%. For an SMSF in accumulation phase normally taxed at 15%, the floor lifts to 30% on the indexed gain. Individuals on 37% or 45% marginal rates pay their marginal rate (above the floor). Companies are already at 30% so the floor is a no-op.
When does the 50% discount beat indexation, and vice versa?
Short holding period with strong nominal growth → the 50% discount wins because indexation can't catch up to the gain in just a few years. Long holding period with modest growth → indexation wins because inflation erodes most of the nominal gain, leaving a small real gain to tax. High-inflation environments shift the math further in indexation's favour. Run your specific numbers — the side-by-side view shows the result directly.
Should I sell my investment property before 1 July 2027?
If you owned the property on 12 May 2026 you are grandfathered — the 50% discount applies whenever you sell, so there's no CGT-driven urgency to sell early. The bigger question is whether to bring forward a sale you were already planning — that depends on your marginal rate, holding period, expected capital growth and selling costs. Run both regimes in the comparator to see the actual numbers.
Does the calculator handle new builds and grandfathered assets?
Yes. For a grandfathered asset, set the regime to Current rules — 50% discount. For a post-12 May 2026 acquisition of an established property, use New rules — indexation + 30% min tax. For new builds purchased after 12 May 2026, the owner can choose at sale — run Compare both and pick whichever produces less tax.
Is this calculator just for property, or also shares and other assets?
The Budget 2026 CGT regime applies to all capital assets — property, shares, managed funds, business assets, crypto — held by individuals, trusts and super funds. This calculator is positioned for property because it includes acquisition and selling costs typical of real estate, but the underlying maths is the same for any asset class. Set acquisition and sale costs to zero for a pure share or unit-trust calculation.
Sources
Last updated: 13 May 2026