CGT valuation terms, defined

CGT split (1 July 2027)

Also called: split point, split value, two-era CGT

The CGT split divides the capital gain on an Australian investment property bought on or before 12 May 2026 into two eras at 1 July 2027. Growth up to 1 July 2027 can still use the 50% CGT discount; growth after it uses CPI indexation of the cost base instead. The property's value on 1 July 2027 is the split point.

50% CGT discount

Also called: CGT discount

The 50% CGT discount halves the taxable capital gain. Under the Budget 2026 changes it continues to apply to growth before 1 July 2027 for properties bought on or before 12 May 2026, and no longer covers growth after that date.

CPI indexation

Also called: cost base indexation, indexation method

CPI indexation increases the property's cost base in line with inflation instead of applying a flat discount to the gain. It is how growth after 1 July 2027 is taxed.

Cost base

The cost base is the amount the capital gain is measured from - broadly what was paid for the property. Under indexation it grows with inflation, and for Bucket A properties the certified value at 1 July 2027 becomes a permanent cost-base record to keep with the purchase contract.

Bucket A

Bucket A is an investment property contracted on or before 12 May 2026. Its owner can choose between a certified valuation as at 1 July 2027 and the ATO's default time-based method to split the gain. Most Australian investment properties are in Bucket A.

Bucket B

Bucket B is a new build bought after 12 May 2026 and never lived in. It gets the 50% discount on the whole gain, or indexation instead.

Bucket C

Bucket C is an existing (second-hand) home bought after 12 May 2026. Indexation applies, with no second option.

ATO apportionment formula

Also called: ATO default method, time-based apportionment, straight-line method

The ATO apportionment formula is the default used when there is no certified valuation: it splits the gain by time held, assuming the property grew evenly across every year it was owned. Because most properties grew faster before 2027, it often understates the pre-2027 value.

Certified valuation

Also called: CGT valuation, certified property valuation

A certified valuation is a formal, written valuation report prepared by a registered property valuer, valuing the property as at a specific date - here 1 July 2027 - following the ATO's approved valuation methodology. It is signed, dated and backed by the valuer's professional judgement, which is what makes it usable as evidence for tax purposes.

Registered property valuer

A registered property valuer holds current registration with their relevant state authority (API - Australian Property Institute - or equivalent). The ATO requires the CGT split-point valuation to come from one.

Desktop valuation

A desktop valuation is completed remotely: the registered valuer uses comparable sales data, council records and property databases without visiting the property. It is faster and lower cost than an in-person valuation.

In-person valuation

Also called: full valuation, inspection valuation

An in-person valuation involves a registered valuer physically inspecting the property - condition, improvements and location factors data alone cannot capture. It carries more weight in an ATO audit and is the type recommended for CGT purposes.

Retrospective valuation

A retrospective valuation values a property as at a past date. Done after 1 July 2027 it may be accepted in some circumstances, but it typically produces a lower estimate, and any uncertainty is resolved in the ATO's favour.

Real estate agent appraisal

An agent's appraisal is an opinion of price to help sell a property. It is not a certified document and does not satisfy the ATO's requirement for a CGT split-point valuation.

Valuation date

The valuation date is the date the property is valued as at - for the CGT split, 1 July 2027 - which is different from the date the report is written. The report must value the property as it stood on 1 July 2027.