When you sell an investment property (a rental house, holiday home, or commercial property) and make a profit, the government taxes that profit. You are only taxed on the actual financial gain you made (the difference between what you bought it for and what you sold it for), not the total amount the buyer paid you. It is important to note that the home you actually live in, your primary residence, is exempt from this tax.

There's no separate "capital gains tax bill." The ATO treats your gain as additional income for that financial year, added to your salary and taxed at your marginal rate through your normal tax return. 

To calculate this accurately, your accountant needs verifiable evidence of what the property was worth at specific points in time — particularly if it was ever your home before becoming an investment. A certified property valuation provides that evidence, protecting you from paying more tax than you owe and from ATO penalties for insufficient substantiation.

If the rent you collect from your investment property fails to cover the total cost of holding that property, such as your mortgage interest, council rates, and maintenance repairs, you are running at a loss.  Historically, the Australian tax system allowed you to deduct that loss against your other income. If you earn $110,000 and your property loses $10,000, you're taxed as though you earned $100,000.

 Two changes apply from 1 July 2027:

• The 50% CGT discount for individuals, trusts and partnerships is replaced with cost-base indexation and a 30% minimum tax rate on gains.
• Negative gearing on established residential properties purchased after 7:30 pm AEST on 12 May 2026 is restricted. New builds, and government housing priorities (build-to-rent, social and affordable housing) remain fully eligible for negative gearing.

You're unaffected. Properties owned, or under contract, before 7:30 pm AEST on 12 May 2026 are grandfathered. You can continue claiming losses against your income as before, for as long as you hold the property.

Your losses aren't lost, and there's no time limit on using them. They're quarantined, meaning they can no longer offset your salary, but they carry forward indefinitely to offset either future rental income from other residential properties or the capital gain when you eventually sell.

The legislation is already law.  It passed Parliament and received Royal Assent in June 2026. The CGT and negative gearing measures commence from 1 July 2027. The purchase-date cut-off for negative gearing, however, has already applied since Budget night (12 May 2026).  There's no window remaining to buy an established property and retain the old treatment going forward.

The exact definition isn't locked in yet. It will be set out in a separate legislative instrument, not the Bill itself. Broadly, it needs to genuinely add to housing supply: think vacant-land builds or a single dwelling replaced with multiple titled properties. A straight knock-down-rebuild of one house for one is unlikely to qualify. We'll update this once it's confirmed.

Partly. Negative gearing changes are residential-property-specific. Commercial property, such as offices and warehouses, is unaffected, and losses remain fully deductible against personal income. The CGT changes are broader. The removal of the 50% discount applies to individuals, trusts and partnerships generally, including share portfolios.

In the case of an investment or commercial property, holiday home or vacant plot of land, generally the price at which you sell the property will be used to calculate capital increase or decrease and any tax payable. However, this standard open market sale price may not be accepted by the ATO if the transaction occurs between related parties, family members, key employees, or offshore owners.

In some instances, including if the property is given away or passed on to a family member, you will need to use the market value of the property instead of the sale price. This is when a certified property valuation for CGT purposes would be required.

A valuation is the most accurate way of providing information on the value of a property asset. This can ensure the individual or entity selling the property is not charged at a higher tax rate than what they are liable. Our team maintains active memberships in recognised professional associations, ensuring total compliance for all current valuations. This independent oversight is essential when evaluating complex changes affecting non-resident individuals who hold interests in local real estate.

Your home (principal place of residence) is usually exempt from CGT unless it has been used to run a business, earn rent, or it is more than two hectares of land. Separately, self-managed super funds (SMSFs) are explicitly excluded from the tax reform, meaning property assets held within an SMSF retain their existing discount structures throughout their holding period or accumulation phase. Note that SMSFs face a separate change: from 10 August 2026, they'll be banned from borrowing to acquire residential property, though existing arrangements are grandfathered.

Further detail about Capital Gains Tax can be found on the ATO website. You can also consult our property valuation experts to benchmark your property's market value and plan your tax position effectively before an asset is sold.