Capital Gains Tax Changes From July 2027: Why Property Owners Are Turning to Valuations

# Capital Gains Tax Changes From July 2027: Why Property Owners Are Turning to Valuations

## Property investors and some home-business owners are being urged to understand how the new CGT system could affect their property before 1 July 2027

A major change to Australia's capital gains tax system is putting **property valuations firmly on the radar**, with investors beginning to prepare for new rules that take effect from **1 July 2027**.

The issue attracted renewed attention this week after 9News reported growing demand for property valuations ahead of the change, as owners consider how the value of their property around the transition date could affect future capital gains tax calculations.

For property owners, however, the message is not that everyone needs to rush out and obtain a valuation immediately.

The more important message is to **understand whether the changes apply to your property, keep appropriate records and seek professional tax advice before making financial or property decisions**.

## What is changing to Capital Gains Tax?

Under Australia's current system, eligible individuals and trusts can generally access a **50% CGT discount** when an asset has been held for at least 12 months.

From **1 July 2027**, the Federal Government will replace the 50% discount for affected future gains with a system based on **inflation indexation of the asset's cost base**.

A **minimum 30% tax rate** will also apply to relevant real capital gains under the new arrangements.

Importantly, the reform is prospective. Gains that accrue before 1 July 2027 retain their existing treatment, while the new arrangements apply to gains accruing from that date.

This makes **1 July 2027 an important dividing point** for affected property owners.

## Why is the 1 July 2027 property value important?

For affected assets held across the transition date, the property's value around **1 July 2027** can be important in determining how much of a future capital gain belongs under the existing system and how much falls under the new system.

This is why professional valuers are expecting increased demand as the date approaches.

A market valuation can provide evidence of what a property was worth at the transition point. Depending on the final circumstances and applicable rules, an owner may also have access to an alternative prescribed apportionment method.

The key point for homeowners and investors is that **the value used should be supportable and based on the property's market value at the relevant date**.

## Do property owners need to order a valuation now?

Not necessarily.

This is an important distinction for owners reading headlines about a "rush" for valuations.

A valuation does **not have to be physically completed on 1 July 2027**. A retrospective valuation can potentially be prepared later, provided it establishes the property's market value as at the relevant transition date.

However, obtaining professional valuation evidence close to the transition date may make it easier for a valuer to use contemporary comparable sales and market evidence.

Property owners should therefore use the period before July 2027 to **prepare rather than panic**.

Current professional guidance also cautions against treating 30 June 2027 as a blanket deadline for selling property or restructuring investments. Individual circumstances can vary substantially.

## What about your family home?

For most Australian homeowners, one of the most important points is that the **main residence exemption has not simply disappeared because of the CGT reforms**.

A property that qualifies as a person's main residence is generally exempt from capital gains tax under the existing rules.

The July 2027 reform does not automatically turn every Australian family home into a taxable CGT asset.

However, the situation can become more complicated where a property has been:

* used to produce income; * rented for part of the ownership period; * used partly as a genuine place of business; * converted between investment and residential use; or * held under particular ownership structures.

That is where individual professional advice becomes particularly important.

## Home-business owners should pay attention

The issue could also affect some Australians who operate a business from their residential property.

The ATO states that while the sale of a home is generally exempt from CGT, **using part of the home for business purposes can create CGT implications in certain circumstances**.

This does not mean that simply answering work emails from your kitchen table or occasionally working from a spare bedroom will automatically create a CGT liability.

The distinction can depend on how the property is used.

For example, the ATO notes that CGT generally will not arise from business use where an owner did not have an area specifically set aside for business activities and did not claim relevant occupancy expenses.

But where a dedicated part of the home is genuinely used as a place of business, different CGT consequences may arise when the property is eventually sold.

Examples could include certain home-based consulting premises, studios, treatment rooms, workshops, salons or other dedicated business areas.

## Renovating before July 2027? Don't assume every dollar increases the valuation

Some property owners may also consider renovations before the transition date in the hope of increasing their property's value.

But spending money on renovations does not automatically translate into an equivalent increase in market value.

A $50,000 renovation, for example, does not necessarily make a property worth $50,000 more.

Location, buyer demand, condition, comparable sales, property type, land value and the quality and relevance of improvements all influence market value.

Owners considering major work primarily for taxation or valuation purposes should therefore obtain appropriate advice before proceeding.

## What should property owners be doing now?

With more than nine months remaining before the new system begins, property owners have time to become organised.

Consider reviewing:

**Your property records** Keep purchase contracts, settlement statements, renovation invoices, major improvement records and other documents that may be relevant to the property's cost base.

**How the property has been used** Consider whether it has always been your main residence, has previously been rented, is currently an investment property or contains an area used specifically for a business.

**Major improvements** Keep records of extensions, renovations and capital improvements rather than relying on memory years later.

**Your ownership structure** Individual, partnership, trust and company ownership can produce different taxation outcomes.

**Professional advice** A registered tax agent or qualified tax adviser can help determine whether the July 2027 changes apply to your circumstances and whether obtaining a market valuation would be appropriate.

## What could this mean for the property market?

The CGT reform is ultimately a taxation change, but taxation decisions can influence property-market behaviour.

As 1 July 2027 approaches, Australia may see increased demand for professional valuations as investors establish records around the transition date.

Some investors may also reconsider the timing of purchases, sales and future investment strategies.

At the same time, the Government is changing negative-gearing arrangements from July 2027, with residential property tax concessions increasingly directed toward new housing supply. These broader reforms could influence investor demand across different segments of the housing market.

The full property-market effect will become clearer as investors, lenders, advisers and buyers respond to the new system.

## RAVS REALTORS Insight

For property owners, the most valuable response to the upcoming changes is **good information and good records — not rushed decisions**.

A property's market value can become significant for many reasons, including selling, refinancing, investment planning and taxation.

Understanding your property's current position well before a major regulatory change gives you more time to speak with the appropriate professionals and make informed decisions.

If you are considering selling, buying or reviewing your property strategy, understanding the current local market remains an important starting point.

### Thinking About Selling or Buying Property?

**RAVS REALTORS** can assist property owners with real estate sales, property-market information and buying opportunities across Melbourne and surrounding areas.

**Unlocking Homes, Elevating Lives.**

Contact RAVS REALTORS to discuss your real estate requirements.

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### Important Disclaimer

This article provides general property-market information only and does not constitute tax, accounting, legal, financial or investment advice. Capital gains tax treatment depends on individual circumstances, property use, ownership structure and applicable legislation. Property owners should obtain advice from a registered tax agent, accountant, solicitor or appropriately qualified financial professional before making decisions based on taxation considerations.

### Sources & Timing

Information checked and updated **15 September 2026**.

Primary information reviewed includes Australian Treasury guidance on the 2026–27 tax reforms, Australian Taxation Office guidance concerning main residences and home-based businesses, current reporting from 9News and contemporary professional guidance concerning the 1 July 2027 valuation transition.