From 1 July 2027, the value of your investment property on that date decides how much of a future gain keeps the 50% CGT discount. You don't have to get a 1 July 2027 property valuation, but it gives you a professional assessment of what the property was worth on the day, rather than an estimate worked back from the sale price.
Here's the short version. From 1 July 2027, the 50% CGT discount is replaced by cost base indexation and a 30% minimum tax, but only for gains made after that date. Gains made before it keep the 50% discount. To split a future gain between the two sets of rules, you need the property's market value as at 1 July 2027.
There are two ways to work it out. You can get a valuation as at 1 July 2027, or use the government's apportionment formula when you sell. A valuation can make sense where most of the growth happened before 1 July 2027. Your accountant can tell you which option suits your situation.
What is changing with CGT on 1 July 2027?
For gains made from 1 July 2027, the 50% CGT discount is replaced by cost base indexation and a 30% minimum tax. Gains made before that date keep the discount.
This is law, not a proposal. The change was legislated in the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received Royal Assent on 26 June 2026, and the ATO confirms the measures and their 1 July 2027 start. According to the Budget 2026-27 explainer, indexation will use CPI, in a similar way to the arrangements that applied between 1985 and 1999.
| Gains made before 1 July 2027 | Gains made from 1 July 2027 | |
|---|---|---|
| How the gain is treated | 50% CGT discount, as now | Cost base indexation (CPI) |
| Minimum tax | None | 30% minimum tax |
If you'd like the wider picture on CGT, SMSF and stamp duty valuations, our guide to independent property valuations covers each one.
Why does your property's value on 1 July 2027 matter?
It's the dividing line between the old rules and the new ones. Whenever you sell, whether that's in two years or twenty, the gain gets split at that date.
The growth up to 1 July 2027 is treated under the current rules, including the 50% discount if you'd normally be eligible for it. The growth after it falls under indexation and the 30% minimum tax. So the property's value on 1 July 2027 decides how much of your eventual gain sits on each side of the line.
That's why a 1 July 2027 property valuation is getting so much attention. The number doesn't change anything today. It only comes into play when you sell, and it'll be there for however long you hold the property.
How that split affects your tax depends on your circumstances, so your accountant is the right person to work through it with.
Do you have to get a valuation?
No. You have two options: a valuation as at 1 July 2027, or the apportionment formula.
The Budget 2026-27 explainer sets this out plainly. Taxpayers can "seek a valuation of the asset as at 1 July 2027" or "use a specified apportionment formula".
Under the current draft, the formula works backwards from your eventual sale price. It assumes the property grew at a steady, compounding rate across the whole time you owned it, then uses that rate to estimate what it was worth on 1 July 2027. Because it needs the sale price, it can only be worked out after you sell.
The formula isn't final yet. Treasury released it as an exposure draft, the Income Tax Assessment (Method for Apportioning Capital Gains and Capital Losses) Determination 2026, in early August 2026, and consultation closed on 21 August 2026. The details could still change before it's confirmed.
Valuation or formula: which suits your property?
It comes down to how your property's value actually moved. The formula suits steady growth. A valuation gives a professional assessment of market value on the day.
The formula spreads growth evenly across the whole holding period. Property rarely grows that way. Values often jump for a few years, then flatten, or dip and recover.
Where most of the growth happened before 1 July 2027 and then levelled off, the formula may put less of the gain before the date than actually happened. A valuation as at 1 July 2027 reflects the market value on that day, whatever the growth pattern was.
The Institute of Public Accountants has made the same point. Tony Greco, senior tax adviser at the Institute of Public Accountants, told Accountants Daily in August 2026: "For assets where growth has been uneven, taxpayers may be better served by obtaining a formal valuation, particularly where most of the growth occurred before 1 July 2027."
A valuation may be worth talking through with your accountant if:
- your area saw strong growth in the years leading up to 2027
- values in your area have since flattened or dipped
- you'd rather have a record made at the time than an estimate calculated years later
Which option you use is a tax decision. Your accountant can advise whether a valuation or the formula suits your situation.
When should the valuation be done?
The valuation has to reflect market value as at 1 July 2027, but it doesn't have to be done before that date. Retrospective valuations are possible.
Timing still matters. A valuation done close to the date is generally more reliable and defensible than one reconstructed years later, because the valuer can inspect the property close to how it stood on the day. The Australian Property Institute suggests getting it done close to 1 July 2027, ideally three to four months afterwards and at most within two years.
The API also expects the 1 July 2027 change to generate demand for valuations at or near that date. With valuers likely to be busy, booking in now is a simple way to get in early, with the valuation prepared for the 1 July 2027 date.
Which properties are treated differently?
Your home is generally exempt, and new builds come with a choice. Pre-1985 properties are the exception: for them, the 1 July 2027 value matters even more.
According to the Budget 2026-27 explainer:
- Your main residence generally stays exempt from CGT.
- Pre-1985 assets: growth up to 1 July 2027 stays completely tax-free. Under the current rules, from that date the property is treated as if it were bought at its 1 July 2027 market value, so growth after that is taxed under the new rules. If you own a property bought before 1985, that value matters for you, so talk to your accountant about it.
- New builds: eligible investors who buy new builds can choose either the 50% CGT discount or indexation and the minimum tax when they sell. What counts as a new build is still being finalised in draft legislation.
What makes a valuation stand up with the ATO?
An independent valuation from a qualified professional valuer, backed by a properly documented report, carries the most weight. The ATO doesn't insist on one, but it's clear that professional valuations are more credible.
On its market valuation of assets page, the ATO says: "Valuations undertaken by professional valuers are more credible than those provided by someone who isn't a professional valuer." It adds: "Generally, if you engage and properly instruct a professional valuer, you won't be liable for penalties if we find the professional valuation is deficient."
The ATO also lists what a valuation report should include, at a minimum:
- the purpose and scope of the valuation
- details of the property being valued
- the date of the valuation, and whether it's retrospective
- the date of inspection, if there was one
- records explaining how market value was worked out
- the value itself
When choosing a valuer, look for professional accreditation, such as a Certified Practising Valuer accredited through the Australian Property Institute. The API describes these report types, from most to least thorough:
- Full inspection valuation: the valuer inspects the whole property. This is the type the API recommends.
- Restricted on-site inspection: a partial inspection.
- Kerbside valuation: the valuer views the property from the street.
- Desktop report: no inspection. The API describes this as an indicative value only, not a valuation report.
Automated online estimates, like the price guides on property websites, involve no valuer at all. They aren't valuations.
How TDA Valuations can help
You can book your CGT valuation now, and we'll prepare it for the 1 July 2027 date.
TDA Valuations prepares valuations for CGT, SMSF and stamp duty purposes. Valuations are independent and prepared by licensed valuers. A complimentary quote is offered.
Whether a valuation or the formula suits you is a question for your accountant. If a valuation is the right call, we can have it ready for when you need it.
Pre-order your 1 July 2027 CGT valuation, call us on 1300 417 317 or visit tdaqs.com.au.
TDA prepares property valuations and tax depreciation schedules. TDA does not provide tax, financial or investment advice. Talk to your accountant or adviser about your situation.
Last reviewed September 2026. The apportionment formula and some of the detailed rules are still in draft, so check back as they're finalised.
