Sell or Hold
Before the 1 July 2027 CGT change
The 50% capital gains discount is replaced on 1 July 2027. Plenty of investors are being told to sell first. Put your own numbers in and see whether that actually leaves you better off, and what growth rate the answer turns on.
What you would walk away with after tax if you sold in that year, against the sell-now proceeds compounding at the return you entered. Both lines are after capital gains tax, selling costs and loan repayment.
The split between pre and post July 2027 growth uses a straight line across the years you own the property. The actual method will be a market valuation at 1 July 2027 or a formula set by legislative instrument, which was still in consultation in August 2026, so treat the split as an estimate.
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For most people who plan to hold for years, no. Selling early to keep the 50% discount means paying capital gains tax now on a gain you could have kept compounding, plus selling costs of two to three per cent, and giving up the rent. Growth up to 30 June 2027 keeps the 50% discount anyway through the transition split, so holding does not lose you the discount you have already earned. It only changes how growth after that date is taxed. This calculator shows the growth rate at which selling early would have been the better call, and for most properties that number is low enough to make holding the stronger position.
Not on the growth you have already had. The gain is split. Growth up to 30 June 2027 keeps the 50% discount no matter when you sell. Growth from 1 July 2027 onwards is taxed under the new method, which indexes your cost base for inflation and applies a minimum 30% rate to the real gain. So the discount on your existing growth is banked, not lost.
No. Indexation strips inflation out of the gain before tax, so when growth is close to inflation the new method can tax you less than the old 50% discount did. The new rules bite hardest on strong growth, because indexation only shields the inflation part while the discount used to halve everything. They are gentler on weak growth. The 30% minimum mostly affects people on lower incomes whose marginal rate would otherwise be under 30%.
It compares the tax and the money. It does not account for whether the property is a good asset to keep, your borrowing position, land tax, the cost and stamp duty of buying back in later, agent and marketing costs beyond the percentage you enter, or your own plans. It also assumes you sell the whole property in one go and that you are an Australian resident for the whole period. Selling is a big transaction with costs that do not show up in a tax comparison, so treat this as one input among several.
Since the 2026 Budget the line doing the rounds has been simple. Sell before 1 July 2027 and keep the 50% discount. It sounds right, and for a small number of people it is. For most it is expensive, and the reason is that the discount you have already earned is not at risk.
The reform splits the gain. Growth up to 30 June 2027 is worked out under the old rules and keeps the 50% discount, whenever you eventually sell. Only growth from 1 July 2027 onwards goes through the new method. Someone who bought in 2016 and sells in 2037 has eleven years of growth sitting in the protected slice. Selling early to protect that discount protects something that was never in danger.
You pay the capital gains tax now instead of years from now, so the money that would have kept compounding goes to the ATO today. You pay selling costs of roughly two to three per cent on the way out, years earlier than you otherwise would. And you give up the rent between now and when you would have sold. Against that, the only saving is the difference in tax treatment on the growth that happens after July 2027, which indexation partly offsets anyway.
Under the new method the cost base rises with inflation, so only the real gain is taxed. When growth runs close to inflation, that can be a better outcome than halving a nominal gain. The new rules hurt most when growth is strong, and are gentle when growth is weak. That is the opposite of how the change is usually described, and it is why the break-even growth rate on this page is the number worth looking at rather than the headline.
There are real cases. If you were going to sell within a year or two anyway, doing it before 30 June 2027 is worth modelling, because you capture the discount on the whole gain and you were paying the selling costs regardless. If you expect little or no growth, or the asset has problems you want out of, the tax question is secondary and you should sell for those reasons. And if the property is genuinely underperforming, the 2027 date is a prompt to review it rather than a reason to keep it.