Bought on or before 12 May 2026
CGT on Investment Property You Already Own: What Changes from 1 July 2027
If you bought your investment property on or before 12 May 2026 and still own it, this is the guide for you. Here's the date that matters most, and how a certified valuation can lower your tax bill when you sell.
Does this apply to you?
If you bought your investment property on or before 12 May 2026, part of your gain still qualifies for the 50% discount when you sell.
This guide is for you if
- You signed the contract to buy on or before 12 May 2026
- You still own the property today
- It's held as an investment (not your main residence)
Your purchase date is what determines this - it doesn't matter whether the home is new or established, or how long you've held it. From here, your gain gets split into two periods by a single date: 1 July 2027.
The two dates that matter
There are two separate dates in play, and it's easy to confuse them. One is when the rules changed. The other is when your tax treatment actually splits.
The Budget date. This is the cut-off for whether your property qualifies for the treatment on this page. Bought on or before this date, this guide applies to you.
The split date. This is where your gain divides in two. Growth up to this date can still use the 50% discount. Growth after it uses indexation instead - your cost base grows with inflation rather than getting a flat discount.
Renovations or capital works you pay for after 12 May 2026 are indexed separately, counted from the date you actually paid for them - not lumped in with the main split.
Your two options at 1 July 2027
To use the discount/indexation split, you need to know what the property was worth on 1 July 2027. There are two ways to establish that, and which one you can use depends on whether you get a certified valuation.
Valuation-based split
Option 1
A registered valuer confirms what your property was actually worth on 1 July 2027. You then calculate the tax both ways and use whichever is lower - the valuation, or the ATO's default.
ATO default apportionment
Option 2 - your only option without a valuation
Without a valuation, the ATO splits your gain by time held, not by when the value actually grew. It's a blunt formula - and it's the only one available to you.
Getting a valuation doesn't lock you into using it. It simply gives you a second number to compare against the ATO's default, so you can use whichever result gives you less tax to pay.
Three worked examples
Every property is different, so we've run the numbers three ways. All three assume no capital improvements - just plain appreciation - and use the top tax rate of 47% to show the largest amount at stake.
Value grew steadily, then kept climbing. Certified valuation wins.
- Bought (2019)
- $300,000
- Value (1 Jul '27)
- $900,000
- Sold (2030)
- $1,000,000
| Step | With a certified valuation | Without one (ATO default) |
|---|---|---|
| How the split works | Valuer confirms the property was worth $900,000 at 1 July 2027 | ATO splits by time: 8 of the 11 years owned were before 1 July 2027 |
| Gain before 1 July 2027 | $600,000 | $509,100 |
| Taxable gain before (50% discount) | $300,000 | $254,550 |
| Taxable gain after (indexation applied) | $16,550 | $115,900 |
Most of this property's growth happened before 1 July 2027 - more than the ATO's time-based formula assumes. The certified valuation captures that, saving $25,300.
Held long-term, most growth happened early. Certified valuation wins.
- Bought (2020)
- $500,000
- Value (1 Jul '27)
- $1,000,000
- Sold (2033)
- $1,100,000
This property doubled in value in the seven years before 1 July 2027, then grew slowly after. The valuation locks in that early growth at the 50% discount rate, saving around $13,500.
Growth mostly happened after 1 July 2027. ATO default wins instead.
- Bought (2010)
- $400,000
- Value (1 Jul '27)
- $500,000
- Sold (2032)
- $1,000,000
Here, most of the growth happened after 1 July 2027, once the discount was no longer available. The certified valuation shows a low value at the split date, which actually works against this owner - the ATO's time-based default gives a far better result. This is why you calculate both and use whichever is lower, valuation or not.
Why this varies so much
The direction and size of the gap depends on the purchase price, how long the property was held, and - most of all - when the value actually grew, not just how much. There's no rule of thumb. You can't know which method is lower until you've run the numbers for your specific property.
Getting a certified valuation never costs you a better outcome - you simply use whichever of the two figures is lower. Skip it, though, and the ATO's default is your only option, whether or not it happens to work in your favour.
Do's and Don'ts
Do's
- Get a certified, In-Person valuation as at 1 July 2027 - Desktop Valuations generally don't give the best value.
- Keep that valuation with your original purchase contract - it's now a permanent cost-base record.
- Calculate the tax both ways once you have a valuation, and use whichever is better for you.
- If you also renovate after 12 May 2026, track that cost separately, with its own start quarter.
- Confirm the valuer values the property "as at" 1 July 2027, not the date they actually visit.
Don'ts
- Assume the 50% discount still covers the whole gain after 1 July 2027.
- Confuse the valuation date with when it was obtained - it must value the property as it stood on 1 July 2027.
- Assume a valuation is the only option once you have one - the ATO's default is still available and, as Example 3 shows, sometimes lower.
- Combine a renovation's cost with the main valuation split - they're worked out separately.
- Assume your tax treatment can change later - the purchase date fixes it from the start.
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