CGT Comparison Calculator: 50% Discount vs Indexation (July 2027)
Australia's 50% CGT discount ends on 30 June 2027. From 1 July 2027, cost base indexation and a 30% minimum tax apply. Enter your investment details to see which rule leaves you better off after tax on shares, ETFs, or investment property.
Your Investment
$
%
%
2.5%
0%2.5% RBA target5%
Until 30 June 2027
Current rules (50% discount)
After-tax value$13,228
Annual return (post-tax)5.75% p.a.
CGT paid$615
Income tax on dividends$732
Total tax paid$1,347
From 1 July 2027
Proposed rules (indexation)
After-tax value$13,002
Annual return (post-tax)5.39% p.a.
CGT paid$841
Income tax on dividends$732
Total tax paid$1,573
Under these assumptions, the new rules leave you with
$226 less after tax
The current 50% discount is more favourable in this scenario.
📅 Updated June 2026 · 2026–27 income tax rates · Proposed CGT changes effective 1 July 2027 (legislation introduced to Parliament, not yet passed). · ATO — Capital Gains Tax
Want the full explanation?
Read our plain-English guide to the CGT changes with worked dollar examples for property investors and ETF holders.
50% CGT discount vs indexation: what's actually changing
Australia has used the 50% capital gains discount since 1999. From 1 July 2027, the Government proposes replacing it with cost base indexation — the system used from 1985 to 1999. Here is what each method means in practice.
Feature
Current rules until 30 June 2027
Proposed rules from 1 July 2027
Applies to
Assets held 12+ months
Assets sold from 1 July 2027
Calculation method
50% of nominal gain is tax-free
Cost base indexed by CPI; 100% of real gain taxable
Minimum tax rate
Your marginal rate (can be 0%)
Higher of marginal rate or 30%
New residential property
50% discount applies
Choose 50% discount OR indexation (whichever is better)
Main residence
Fully CGT exempt
Fully CGT exempt — no change
Superannuation funds
33.3% discount
33.3% discount — no change
Trusts
50% discount passes to beneficiaries
New rules apply at the beneficiary level
Which CGT rule benefits you more?
The answer depends on your marginal tax rate, how long you hold the asset, and how quickly it grows relative to inflation. Use the calculator above to model your specific numbers — the guide below explains the general pattern.
The 50% discount wins when:
Your marginal rate is 32% or above (the most common scenario)
Asset growth significantly exceeds CPI — the nominal gain is large
Holding period is under 7–10 years (indexation hasn't compounded much)
Inflation is low (below 2%), reducing the indexation benefit
Indexation wins when:
Your marginal rate is at or near 30% (the floor rate under new rules)
Asset growth is modest and close to CPI — low real gains
Very long holding period (20+ years) with high sustained inflation
Asset is a new residential property (you can choose the better method)
In most historical Australian scenarios — where property and equities have grown well above CPI — the 50% discount has been the more generous method. The 30% minimum tax further disadvantages lower-income investors who would otherwise pay CGT at 0–18%.
How to use this CGT comparison calculator
Enter your initial investment — the purchase price of your shares, ETF holding, or investment property.
Select your marginal tax rate — use the rate that will apply in the year you plan to sell. Your capital gain is added on top of other income, which can push you into a higher bracket.
Set the holding period — the number of years until you sell. The 1 July 2027 transition is automatically factored in for any period greater than one year.
Enter your return and dividend yield — total annual return before tax, and the income (dividend or distribution) component. The remainder becomes the capital growth rate.
Adjust the inflation slider — the default 2.5% matches the RBA target. A higher assumption gives the new indexation rules more credit.
Add optional inputs — click the "+" to enter monthly contributions and a franking credit percentage for more accurate modelling of Australian ETF or share portfolios.
How the transition works for investments held before 1 July 2027
If you bought an asset before 1 July 2027 and sell it after that date, your capital gain is split into two portions. Gains accrued before 1 July 2027 are still eligible for the 50% CGT discount (provided you held the asset over 12 months). Gains accrued after 1 July 2027 use the new indexation rules.
The ATO will allow two methods to calculate the split: a formal independent market valuation as at 1 July 2027, or a legislated time-apportionment formula. For assets that grew strongly in earlier years, a market valuation may lock in a larger pre-July 2027 portion and reduce the amount taxed under the less generous new rules.
This calculator uses a simplified time-proportional split as a proxy for the transition. For a detailed explanation with worked property and ETF examples, see our full guide to the CGT changes from 1 July 2027.
Frequently asked questions — CGT changes and this calculator
What is replacing the 50% CGT discount in Australia?
The 50% CGT discount is being replaced with cost base indexation from 1 July 2027. Instead of halving the nominal capital gain, your original purchase price is adjusted upward by the Consumer Price Index (CPI) for each year you held the asset. Only the real, inflation-adjusted gain is taxable. A 30% minimum CGT rate also applies — so even if your marginal rate is below 30%, you pay at least 30% on that gain.
Will I pay more or less CGT under the new indexation method?
For most Australian investors, the new rules mean paying more CGT. Australia's asset prices — particularly property and equities — have historically grown well above CPI, so the 50% nominal discount has been more generous than stripping out inflation alone. The 30% minimum rate further disadvantages lower-income investors who currently pay CGT at 18% or 0%. Only investors in very low brackets (0–18%) with long holding periods in a high-inflation environment are likely to benefit from the new system.
Does the CGT change affect ETFs and shares, or just property?
The change applies to all CGT assets held by Australian resident individuals — ASX shares, ETFs, managed funds, investment property, cryptocurrency, and foreign shares. Superannuation funds are not affected and retain their 33.3% CGT discount. Your principal place of residence remains fully exempt.
Should I sell my investment property or ETFs before July 2027?
There is no universal answer. Selling before July 2027 locks in the 50% discount on all gains to date, but you pay CGT now and lose compounding on that capital. The transitional rules let you keep the 50% discount on pre-July 2027 gains even if you sell years later — so you are not forced to sell. Factors to weigh include your marginal tax rate, how much the asset is likely to grow after July 2027, transaction costs, and whether the legislation ultimately passes. Get advice from a registered tax agent before deciding.
What is the transition rule for investments I already hold?
For assets bought before 1 July 2027 and sold after that date, the gain is split into two portions. Gains accrued before 1 July 2027 are eligible for the 50% CGT discount. Gains accrued after 1 July 2027 use the new indexation method. The ATO will prescribe either a formal market valuation method or a time-apportionment formula to calculate the split. This calculator uses a time-proportional split as a simplified proxy for that transition.
Does the CGT change affect my main residence?
No. The principal place of residence CGT exemption is completely unchanged. These reforms target investment assets only — shares, ETFs, and investment property. Your family home is unaffected.
Do superannuation funds pay the new CGT rate?
No. Complying superannuation funds retain their 33.3% CGT discount on assets held over 12 months. The new rules apply to individual taxpayers only. Note that Division 296 tax is a separate measure affecting individuals with super balances above $3 million — that is a different reform.
What marginal tax rate should I use in the calculator?
Select the bracket that matches your total income for the year you plan to sell the investment, not your current income. Remember that your capital gain (or half of it under current rules) is added on top of your other income for that year — a large gain can push you into a higher bracket. The calculator uses 2026–27 rates including the 2% Medicare levy.
How accurate is this calculator?
This calculator is a modelling tool for illustrative comparison purposes. It uses a year-by-year simulation of portfolio growth and annual dividend taxation. CGT is calculated at the end of the holding period using a simplified time-proportional transition split rather than a formal ATO market valuation. It does not model brokerage fees, fund management costs, tax loss harvesting, or complex ownership structures. Always consult a registered tax agent for advice specific to your situation.