The 1 July 2027 CGT Changes: What They Mean If You Own Property in Brisbane's Inner West
Australia's capital gains tax reform has been written about endlessly and explained badly. Most of the coverage is aimed at investors with large portfolios, and almost none of it answers the question most owners actually have: does this affect me, and do I need to do anything about it?
For a lot of people the answer is no. For some it is yes, and there is a single date that decides which group you are in.
This is the Brisbane Inner West version, for the Paddington Queenslander, the Auchenflower rental, and the Red Hill cottage that has been in the family since the 1970s.
It is law, not a proposal
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Act 2026 passed both houses of Parliament on 25 June 2026 and received royal assent the following day. A great deal of commentary still describes these as "proposed changes". They are not. They take effect from 1 July 2027.
Three changes matter to property owners.
The 50% CGT discount ends. From 1 July 2027, individuals, trusts and partnerships lose the flat 50% discount on capital gains. It is replaced by CPI indexation of your cost base, plus a minimum tax rate of 30% on the resulting real gain. In plain terms, you are taxed on your above-inflation profit rather than on half of your total profit.
A valuation date is created. Assets held on 30 June 2027 are treated as sold just before 1 July 2027 and reacquired on that date at market value. Growth up to that point keeps the old 50% discount. Growth after it falls under the new system.
Negative gearing narrows. From the 2027-28 income year, losses on established residential properties purchased after 7:30pm AEST on 12 May 2026 can only be offset against residential property income, including capital gains on property. Excess losses carry forward. Anything owned, or under contract, before that moment is grandfathered and keeps the current treatment for as long as it is held. New residential dwellings and eligible affordable housing sit outside the restriction and retain the option of the 50% discount.
If you live in your home, this is not your problem
The main residence exemption was not touched. Your family home remains the most tax-effective asset most Australians will ever own, and nothing in this legislation changes that.
A recent sale of ours makes the point. We acted for an Auchenflower owner who bought their home in 1994 for approximately $300,000 and sold it this year for over $2.5 million. Because it was their principal residence throughout, no capital gains tax applied to that growth at all. Not before the reform, not after it.
If your home is the only property you own, you can stop here with a clear head.
The 1 July 2027 valuation date
Everything below applies to property beyond your home. An investment property. A holiday place. A block you have held onto. A house that came down through the family. An estate you are executor for.
On 1 July 2027, every CGT asset held by an individual or trust is treated as if it were sold the day before and bought back at market value. Nothing is triggered. You pay nothing on the day. But a line is drawn through your ownership.
Everything the property gained before that line keeps the old 50% discount. Everything it gains after falls under indexation and the 30% minimum tax. Which means the market value of your property on 1 July 2027 is the figure that permanently decides how much of your eventual profit is taxed the generous old way and how much is taxed the new way. You could hold for another twenty years and that number will still be doing work on your tax return.
Why an averaging formula is a poor fit here
If you do not have a value at that date, there is a fallback. Treasury's explanatory material indicates the default approach estimates an asset's value at 1 July 2027 based on its average rate of growth across the ownership period.
For a parcel of listed shares, that is broadly reasonable. For Inner West property, it is a blunt instrument.
Return to that Auchenflower result. Approximately $300,000 in 1994 to over $2.5 million in 2026. Spread evenly, an averaging approach treats that as roughly $69,000 of growth arriving every single year for 32 years. Anyone who owned Brisbane property through the flat stretch of the 2010s and then watched what happened from 2021 knows it did not arrive that way.
Had that property been a rental rather than a home, the difference between an averaged value and its genuine market value on 1 July 2027 would sit on the owner's file for as long as they held it. A contemporaneous appraisal, done at the time with real comparable evidence, is always a stronger position than a retrospective one.
Four owners who should be paying attention
The long-term landlord. You bought in Toowong or Auchenflower ten or fifteen years ago. Your negative gearing is grandfathered and nothing forces your hand. But the split in your future CGT position is set by a value you may not currently hold.
The pre-1985 owner. Property acquired before 20 September 1985 sat outside the CGT system entirely. This Act brings future growth into it. Gains up to 1 July 2027 remain exempt, and growth after that date becomes taxable. Across Red Hill, Milton and Paddington there are still homes bought in the 1970s in family hands. For those families, the 1 July 2027 valuation is what protects five decades of tax-free growth. This is the group with the most at stake.
The executor or trustee. If you are administering an estate or family trust holding property across the transition date, this is now a diary item. Estate property is where an averaging approach performs worst, because ownership periods are long and growth is rarely even.
The owner quietly wondering whether to sell. A fair question, and our answer may not be the one you expect.
We are not going to tell you to panic sell
For most owners, selling before 1 July 2027 to beat the tax does not stack up. The growth you have already earned is protected by the split treatment. Selling early means surrendering your rental income, your future growth and your position in a tightly held market, and doing it alongside everyone else who read the same alarming headline.
There is a market argument too. Brisbane dwelling values continued rising through May 2026 while Sydney and Melbourne fell, but listing volumes lifted and investor sentiment softened after the Budget. A crowded run of stock through the first half of 2027 would not serve sellers. Scarcity has driven Inner West values for a decade, and a panic window is precisely what erodes it.
Sell because the property no longer suits your life, not because of a date on a calendar.
One Queensland detail worth knowing
For most property sales, the CGT event happens on the contract date, not on settlement. A contract signed on 28 June 2027 that settles in August generally sits under the old rules. If timing ever becomes relevant to you, that is a conversation for your accountant in early 2027, not in the final week of June.
What to do between now and then
Get a written appraisal now. It establishes a baseline and tells you whether your position has genuinely changed or whether the headlines have simply made you anxious.
Diary a second appraisal for the first week of July 2027. That is the one that goes on file. We are keeping a list and will make contact when the window opens.
Take real numbers to your accountant, not estimates. They can only advise on what you give them. Most owners we speak to are out by six figures in one direction or the other.
Why us
We are not accountants and we do not give tax advice. What we provide is the part your accountant will ask for and cannot produce: current, defensible market value backed by Inner West comparable sales.
We work Paddington, Red Hill, Bardon, Toowong, Auchenflower, Milton and Petrie Terrace, and are deeply familiar with the area. We know what rear lane access does to a Paddington valuation, what a poor post-war rebuild costs in Bardon, and which Toowong buildings buyers will not touch. That is the difference between a number and a number you can stand behind.
Call Glynis Austin, Felicity Austin or Lucas Brett on 0478 99 88 11 to book a time. If the appraisal is purely for your own records, say so and that is exactly what it stays.
Sources: Treasury Laws Amendment (Tax Reform No. 1) Act 2026; Income Tax Rates Amendment (Tax Reform No. 1) Act 2026; Treasurer's second reading speech, 28 May 2026; PwC Australia, 2026-27 Federal Budget CGT and housing tax reform; Corrs Chambers Westgarth, Capital gains tax and negative gearing amendments; Treasury explanatory materials. General information only. This article is not tax, financial or legal advice and does not take your circumstances into account. Speak to your accountant or a registered tax agent before acting. Sale figures are approximate and provided for illustration.