After Australia's tax reform, what do local Australians need to consider most when investing in established homes?

Many clients have recently been asking: "Will buying an established property be affected after this Australian tax reform?"

Firstly, this tax reform only affects established properties. Since overseas buyers can only purchase new properties — including overseas people holding a temporary Australian visa who buy for their own occupation, who also cannot purchase established properties — there is no impact on them. So the tax reform only applies to established properties purchased by Australian citizens and Australian PRs.

Here's the bottom line today:
For established property investment, the most important change is that the way Capital Gains Tax is calculated may see a major shift.

Key points of the new system:

From 1 July 2027, the 50% Capital Gains Tax discount that was previously available after holding an asset for more than a year may change to:

Cost base adjusted for inflation (Indexation) + a minimum Capital Gains Tax rate of 30%

So what scenarios could arise for established properties?

[Scenario 1]
Sale completed before 1/7/2027
→ Still calculated under the old system

[Scenario 2]
Asset purchased only after 1/7/2027
→ Entirely under the new system

[Scenario 3 (the one most people care about)]
Purchased before 2027 but sold only after 2027

This situation will use a "staged calculation":

▪ Capital growth generated before 1/7/2027
→ Uses the old system

▪ Capital growth generated after 1/7/2027
→ Uses the new system

In other words:

1 July 2027 may become a very important "valuation reference date".

So the question is: "Should you actually get a valuation done?"

There are mainly two approaches:

① Obtain a professional valuation report
② Use the apportionment formula provided by the ATO

So which is better?

A simple way to understand it:

If most of the property's growth occurred in the earlier period
→ A valuation is usually more favourable

If the strong growth only started later
→ Using the apportionment formula may be more advantageous

[My recommendation]
 Around 1/7/2027, whether it's your own home or an investment property, it is advisable to keep valuation records

Because:
A property that is your own home today doesn't mean it won't be converted into an investment property in the future.
With valuation records, you generally have more room for tax planning when you sell in the future.

(The above is for general information purposes only. For actual tax arrangements, please confirm with a professional accountant or tax adviser.)