CGT changes from 1 July 2027: do your investment properties need a valuation?
If you own an investment property, one date matters more than any other for your future tax: 1 July 2027. The long-standing 50% CGT discount is being replaced, and many investors are asking whether they need a formal valuation at that date. Here is what has changed and what we recommend.
What’s changing
From 1 July 2027, the 50% CGT discount will be replaced by cost base indexation for assets held longer than 12 months, with a 30% minimum tax on net capital gains. This applies to individuals, trusts and partnerships. The changes were announced in the 2026-27 Federal Budget and have since been legislated.
In plain terms, instead of halving your gain, the tax system will adjust your cost base for inflation and tax the remaining gain, subject to the 30% minimum.
Existing properties are split in two
The new rules don’t apply to all your growth. For a property held before 1 July 2027 and sold afterwards, growth up to that date keeps the existing 50% discount, and growth after that date falls under indexation and the minimum tax.
That’s why the property’s value at that date matters. The split is based on market value at 1 July 2027, not on days held. Your earlier gain is that value less your cost base, and anything above that value at sale is post-reform gain.
So, do you need a valuation?
Not necessarily. A formal valuation is not compulsory. There is also no lodgement deadline on 30 June 2027. You choose between market value at that date and Treasury’s apportioning formula when you lodge the return for the year you sell.
You have two options:
- A market valuation as at 30 June / 1 July 2027. This is the most accurate option and reflects what your property was actually worth. The value that matters is the market value at the end of 30 June 2027. This will need to be done by a Valuer not a Real Estate Agent.
- Treasury’s apportioning method. This is a free formula that estimates the 1 July 2027 value by assuming the property grew at one steady rate. Property markets rarely grow in a straight line, so for some properties this will produce a lower, less favourable starting value than a real valuation would.
Which is better depends on how your property’s growth has actually played out, how long you expect to hold it, and how much growth you expect after 2027. We can model both for you.
Timing: you don’t need it on the day
A valuation obtained now can’t tell you what the property will be worth on 1 July 2027. A retrospective valuation can also work. Valuers can use historical market evidence to determine the value as at the reform date, at any point before the property is eventually sold. That said, evidence is stronger when it’s gathered soon after the date. You can pre-book a valuations to take advantage of discounts offered by some valuers.
For most investors, a sensible plan is to book a valuation in the months before 1 July 2027 to be prepared and keep the report with your tax records.
Contact the STS Accounting team if you have any further questions about CGT and investment properties.
