Should you sell your investment property before July 2027, while the 50% CGT discount still exists? Plenty of investors are asking, and one national news headline put it as “could it spark a rush to sell?” For most people the answer is no, and the reason is written into the legislation itself. Here is how the deadline really works, what selling would cost you, and the smaller group of investors who genuinely should think about it.
What changes on 1 July 2027
From 1 July 2027, the 50% CGT discount is replaced for individuals, trusts and partnerships. Capital gains are instead adjusted for inflation, and a minimum 30% rate applies to the real gain. We covered the full reform, including the negative gearing side, in our 2027 investor playbook.
The fear driving the sell-before-the-deadline question is simple. If the discount disappears in under a year, shouldn’t you cash out while it still applies?
That fear skips the most important feature of the new law.
Gains before July 2027 keep the discount
The legislation splits every gain at 1 July 2027, and the Treasury factsheet is explicit about what that means. Assets held across the date “will be treated under current arrangements on gains made prior to this date, and under the new arrangements for gains made after this date”. In other words, every dollar of growth your property has already earned keeps the 50% discount, no matter when you eventually sell.
Treasury’s own worked example makes it concrete. A property bought in July 2022 for $800,000 and sold in July 2032 for $1.6 million has made an $800,000 gain. The $331,371 that accrued before 1 July 2027 still gets the 50% discount at the 2032 sale. Only the $468,629 of growth after the date falls under indexation and the minimum rate.
You do not need a valuation done in 2027 either. The factsheet says the 1 July 2027 value is worked out “as part of their tax return in the year the asset is realised”, by valuation or by an ATO apportionment formula. Getting a valuation around the date anyway is cheap insurance, because Corrs Chambers Westgarth points out that proving a 2027 value years later can be harder without one. But nobody loses the discount by holding.
Treasury even states the conclusion for us: “there is no incentive to buy or sell assets before this date.”
So the thing selling before the deadline protects is only the tax treatment of growth that has not happened yet. And that protection is not free.
What a sale would cost you
Selling one property to buy another is one of the most expensive moves in property. On an $850,000 sale and a similar repurchase in Queensland, the exit-and-re-entry bill runs to roughly $53,000 before you pay a dollar of CGT.
Agent commissions run 2% to 3% nationally, stamp duty on the way back in is $31,275 at that price in Queensland (check your state with our stamp duty calculator), and conveyancing and marketing add a few thousand more. Selling also crystallises your CGT now instead of deferring it, which hands the tax office money that would otherwise keep compounding for you.
Two more costs sit outside the chart. The first is timing. Sydney values are 3.7% off their January peak and auction clearance has been under 50% for two months, so a seller today is selling into the softest market in years. The second is bigger and mostly invisible. If you bought your property before 7:30pm on 12 May 2026, it is grandfathered, and the Treasury factsheet says such properties can be negatively geared “until sold”. Sell it, and any established property you buy to replace it falls under the new quarantining rules. That flexibility does not transfer, and you cannot buy it back.
Who should genuinely think about selling
None of this means nobody should sell before mid-2027. The maths points that way for a few groups.
Investors who were selling anyway. If a property has underperformed for years on growth and yield, and you would sell it regardless, doing so before 1 July 2027 keeps the whole gain under the current rules and skips the valuation-and-apportionment exercise entirely. The deadline is a scheduling nudge for a decision you had already made, not a reason to make it.
Sellers expecting a low-income year. The new 30% minimum rate mostly affects people whose marginal rate would otherwise be low in the year of sale, for example someone selling a large gain after retiring. Recipients of means-tested income support such as the Age Pension or JobSeeker are exempt, with the final list of payments still to be prescribed. If you are in the narrow band above those payments but below a 30% rate, realising before the deadline can genuinely save tax. This is exactly the situation to model with an accountant.
Portfolio rebalancers with a clear next step. If the equity in a tired asset would work harder somewhere else, and the numbers survive the $53,000-style round trip plus CGT, the current rules make this financial year the cleanest window to do it. Run both sides through our capital gains tax calculator, which models the old regime, the new one and the transition split.
One timing note if you do sell. For most sales the CGT date is the contract date rather than settlement, so a sale contracted in June 2027 should fall under the current rules even if it settles later. That principle has not yet been spelled out in guidance for the transition, so confirm it with your accountant before you rely on it.
Four questions before you decide
- Would you sell this property on its fundamentals alone? If the answer is no, a tax deadline that grandfathers your existing gains is not a reason to start.
- What does the split actually cost you? Model your property in the CGT calculator with a sale now versus a sale in five and ten years. The difference is usually smaller than the headlines suggest, because the pre-2027 gain is protected either way.
- Have you priced the full round trip? Commission, stamp duty, conveyancing, the CGT you bring forward, and the grandfathered negative gearing you give up.
- Is the equity better released than realised? A loan split against your equity funds the next purchase without selling anything, and keeps the grandfathered property working.
Tax deadlines make poor sell signals
The 2027 changes are real and they matter for what you buy next. But the legislation was deliberately built so that holding through the date costs you nothing on the gains you have already made, and Treasury said so in plain words. Pitcher Partners put the professional consensus well in July: investment decisions “should continue to be driven by underlying commercial fundamentals rather than tax alone”. Sell because the property deserves selling. Hold because it deserves holding. The calendar is the least important number in that decision.
Sources
- Tax explainers: negative gearing and capital gains tax - Treasury factsheet, Budget 2026-27
- Capital gains tax and negative gearing amendments - Corrs Chambers Westgarth
- Federal Budget 2026-27: capital gains tax - William Buck
- How capital gains tax changes from 1 July 2027 - Westcourt
- A major tax deadline is coming next year - SBS News
- Australians weigh impact of tax changes - SBS News
- How much do real estate agents charge? - Which Real Estate Agent
- Queensland transfer duty rates - Queensland Revenue Office
- Budget tax reforms raise risk of ill-advised investment decisions - PIPA via MPA
- Positive gearing in a post-Budget 2026 landscape - Pitcher Partners
This is general information only and not financial, tax, or credit advice. The transition rules described include elements still to be finalised in guidance, and the right decision depends on your circumstances. Speak to your accountant before selling or restructuring.
See how we find the properties worth holding through any tax change.
If you’re weighing up a sale and want the hold-versus-sell numbers run on your actual property, book a free discovery call.
