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Real Estate Insight

Capital gains tax

Capital gains tax calculator for investment property (2027 rules)

See the tax on selling an investment property under the rules that apply on your sale date: the 50% discount before 1 July 2027, and the split with CPI indexation and the 30% minimum tax after it. It also tells you whether a 30 June 2027 valuation beats Treasury's formula.

By the Real Estate Insight team · Last reviewed 4 October 2026 · How we check our numbers

Buying
$
$

Stamp duty, legal and inspection costs.

$

Renovations and extensions, not repairs.

Selling
$
$

Agent's commission, marketing and legal.

$

Div 43 claimed while you owned it. It reduces your cost base.

Value at 30 June 2027

Treasury's draft method assumes the price grew at one steady daily rate from purchase to sale. For these dates it puts the value at $856,521.

Owners
$

Salary and other income, before this gain.

More settings
$

Losses quarantined under the 2026 rules (established homes bought after 12 May 2026). They reduce the gain.

% a year

2.5% is the middle of the RBA's target band.

Sold after 1 July 2027, bought before · 2030-31 tax year

Capital gains tax of $36,960

On a capital gain of $246,000. That's $14,200 less than if the old 50% discount still applied ($51,160). In today's dollars, about $33,704.

How it's worked out

Capital gain$246,000
Value at 30 June 2027 (Treasury formula)$856,521
Gain to 30 June 2027, after the 50% discount$87,261
Gain after July 2027, cost indexed by 7.7%$5,527
Taxable gain$92,787
30% minimum tax top-upNone
Tax on the gain$36,960

About this estimate. General information only, not tax or financial advice. It assumes resident individuals, 2026-27 tax rates and the Medicare levy for later years, CPI of 2.5% a year from July 2027, and the indexation factor rounded to 3 decimals as the Act requires (s960-275(5)). It doesn't cover the main residence exemption, trusts, companies or super funds. Treasury's apportioning formula is a draft as at October 2026. Real Estate Insight is not a registered tax agent: check your figures with one before you sell.

What changes on 1 July 2027

Until 30 June 2027, individuals who hold a property for at least 12 months pay tax on half the capital gain. From 1 July 2027, under the Tax Reform No. 1 Act passed in June 2026, that 50% discount is replaced for gains made after that date:

  • Growth up to 30 June 2027 keeps the discount. Anything you own on that date is treated as sold and bought back at its value on 30 June 2027. Half of the gain to that point is taxable, but only when you actually sell.
  • Growth after 30 June 2027 is taxed in full, after inflation. Your cost from 1 July 2027 is indexed by CPI, so you're only taxed on the real increase.
  • A 30% minimum tax applies to that later part. If your normal tax on it comes to less than 30%, you pay a top-up. People on an income support payment in the year of sale are exempt.
  • New homes can keep the old treatment. A new residential dwelling can use the 50% discount on its whole gain instead.

The main residence exemption is unchanged: no CGT on a home you've lived in for the whole time you've owned it.

How the 30 June 2027 value is set

The split depends on what the property was worth on 30 June 2027, and you have two ways to put a number on it.

A valuation. A market valuation as at 30 June 2027. It doesn't have to be done on the day: a valuer can look back to that date when you sell.

Treasury's formula. A draft determination (consultation closed 21 August 2026) lets owners of real property skip the valuation. It assumes the purchase price grew at one steady daily rate from the day you bought to the day you sold, and reads the 30 June 2027 value off that curve. The calculator applies it exactly as the draft sets out, and reproduces its worked example to the cent ($993,429.55).

Which is cheaper isn't always the higher value. A higher 30 June 2027 value moves more of the gain into the discounted part, which helps if the property keeps growing faster than inflation afterwards. But if it grows more slowly than inflation after July 2027, the indexed cost already covers that later growth with room to spare, and a lower value can cost less tax, because it moves gain into the part that indexation shields. You don't have to guess: enter a valuation estimate in the calculator and it shows the tax both ways, or use the valuation vs formula calculator to see the whole range.

A worked example

Treasury's own example: Jane buys for $800,000 on 1 July 2022 and sells for $1,600,000 on 1 July 2032. The property is worth $1,131,371 on 30 June 2027, and she's on the top tax rate.

TreasuryThis calculator
Gain to 30 June 2027, after the 50% discount$165,685$165,686
Gain after 1 July 2027, cost indexed by CPI$319,958$320,419
Tax at 47%$228,252$228,469
Tax if the 50% discount had stayed$188,000$188,000

The $217 gap is deliberate. The Act says the indexation factor is worked out to three decimal places (s960-275(5) ITAA 1997), so five years at 2.5% is 1.131, not Treasury's unrounded 1.131408. We follow the Act. The methodology page lists every Treasury example we test against.

What goes into your cost base

  • The purchase price, plus stamp duty, legal fees, and building and pest inspections.
  • Capital improvements such as an extension or a new kitchen. Repairs and maintenance don't count.
  • The costs of selling: agent's commission, marketing and legal fees.
  • Less any capital works deductions you've claimed. They lower the cost base, which raises the gain.

Interest, council rates and other holding costs you've already claimed against rent aren't added to the cost base.

What this calculator doesn't cover

It's built for Australian resident individuals selling a rental property. It doesn't model the main residence exemption or the 6-year rule for a former home, properties held in a trust, company or super fund, foreign residents (who get no discount and no indexation), or shares. If any of those apply, use it as a starting point and talk to a registered tax agent.

Questions people ask

How much capital gains tax will I pay on an investment property?
It depends on the gain, how long you held it, your other income in the year you sell, and whether the sale falls before or after 1 July 2027. Put your figures into the calculator above. As a rough guide under the old rules, an owner on $120,000 who makes a $300,000 gain pays tax on $150,000 of it: about $63,850 including the Medicare levy in 2026-27.
Do the 2027 changes apply to property I already own?
Yes, but only to growth after 30 June 2027. Growth up to then keeps the 50% discount, even if you sell years later. The property is treated as sold and bought back on 1 July 2027, and the gain to that date is held over until you actually sell.
Will I be taxed on 1 July 2027?
No. Nothing is payable on 1 July 2027. The gain up to that date is only worked out, and taxed, in the year you sell.
Do I need a valuation on 1 July 2027?
No. You can get a valuation later that values the property as at 30 June 2027, or use Treasury's formula, which needs no valuation at all. You choose when you lodge the return for the year you sell. The calculator shows both so you can see whether a valuation would pay for itself.
Is the 30% minimum tax a flat 30% on my gain?
No. It only applies to the part of a gain made after 1 July 2027, after indexation. If your normal tax on that part already works out at 30% or more, you pay nothing extra. If it's lower, you pay a top-up to reach 30%. Treasury's example: a $10,000 gain taxed at $1,400 gets a $1,600 top-up. People on an income support payment that year are exempt.
Is it the contract date or the settlement date that counts?
The contract date. For a sale, the CGT event happens when you sign the contract (s104-10(3) ITAA 1997). A contract signed on 30 June 2027 that settles in August is taxed under the old rules.
Does depreciation reduce my cost base?
Capital works deductions (Div 43) do: they come off your cost base, which increases the gain. Plant and equipment is dealt with separately as a balancing adjustment on those items when you sell.
What if the property is brand new?
New residential dwellings can use the 50% discount on the whole gain instead of indexation and the minimum tax. You pick whichever leaves you better off, and the calculator does that for you when you tick "Bought brand new".

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