From 1 July 2027, Australia’s capital gains tax (CGT) rules will change.
For property investors who hold an investment property across this date, it may become important to have reliable evidence of what the property was worth as at 1 July 2027.
Understanding this change early can help property owners prepare and seek the right professional advice.
What Is Changing from 1 July 2027?
For affected investment properties held across 1 July 2027:
- Gains accruing before 1 July 2027 will remain under the existing CGT rules.
- Gains accruing from 1 July 2027 will come under the new inflation-based system and minimum tax rules.
This means that the value of an investment property at 1 July 2027 could become important when calculating a future capital gain.
Why Could a Property Valuation Be Important?
Property prices do not rise evenly every year.
If a significant amount of a property’s growth occurred before July 2027, a reliable valuation may help establish how much of that gain falls under the existing CGT rules.
The Australian Property Institute (API) recommends that affected property owners consider obtaining a comprehensive inspection valuation close to 1 July 2027 and retaining the valuation report and supporting evidence.
A retrospective valuation may still be possible later. However, establishing an accurate historical value can become more difficult as time passes and relevant market evidence becomes harder to obtain.
What Should Property Owners Do?
There is no need to wait until July 2027 to start thinking about these changes.
Property owners should consider speaking with their accountant or registered tax adviser about whether the changes may affect their investment property.
They can also advise whether arranging an independent valuation to establish the property’s market value as at 1 July 2027 may be appropriate for your circumstances.
Preparing early can help ensure that the right information and supporting evidence are available if they are needed in the future.
Planning Ahead
At Centenary Approach, we believe good property management is not only about looking after your property. It is also about helping property owners stay informed about changes that may affect their investment.
Understanding the upcoming CGT changes and seeking professional advice early may help you prepare for the future and avoid unnecessary complications later.
If you would like to discuss the management of your investment property, contact Centenary Approach.
Disclaimer: This article provides general information only and does not constitute tax, financial or legal advice. Tax laws and individual circumstances can vary. Property owners should seek advice from a qualified accountant or registered tax adviser regarding their individual circumstances.
