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Australia to End 50% CG Discount, Limit Negative Gearing

5/14/2026

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Summary

Story summary

Jim Chalmers announced that from 1 July 2027 the 50 % capital gains discount will be removed and negative gearing limited to new builds.
Transitional rules let gains earned before 1 July 2027 keep the discount, with later gains taxed on inflation-indexed bases at a 30 % minimum.
Analysts expect investors to shift to equities, commercial property and self-managed super funds, while Treasury modelling predicts house-price growth to slow about 2 %.

History

Historical Context

Australia introduced capital gains tax on 20 September 1985 under the Hawke-Keating government, applying CPI indexation to assets bought thereafter. In 1999 the Howard government replaced indexation with a 50 % discount for individuals. Treasury’s 2027 proposal to scrap the discount and broaden revenue revives the original aim of widening the tax base.

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Story summary

Jim Chalmers announced that from 1 July 2027 the 50 % capital gains discount will be removed and negative gearing limited to new builds.
Transitional rules let gains earned before 1 July 2027 keep the discount, with later gains taxed on inflation-indexed bases at a 30 % minimum.
Analysts expect investors to shift to equities, commercial property and self-managed super funds, while Treasury modelling predicts house-price growth to slow about 2 %.

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