The CGT discount changes from 1 July 2027: what the law actually says

The CGT discount has not been abolished. Act No. 49 of 2026 received Royal Assent on 26 June 2026; Schedule 1 commenced on 1 July 2026, but the substantive changes apply only to CGT events happening on or after 1 July 2027. From that date, resident individuals and non-super trusts fall to 0% on ordinary assets. Complying superannuation entities keep 33⅓%; qualifying new residential dwellings keep 50%; eligible affordable housing keeps up to 60%; companies never had a discount and are unchanged. Instead, individuals and trusts may index the cost base — only for CGT events on or after 1 July 2027, only where Division 114 is satisfied, and only on expenditure incurred on or after that date.

Key points:
- This is **enacted law**, not an announcement. Act No. 49 of 2026 received Royal Assent on **26 June 2026** and all four Parts of Schedule 1 commenced on **1 July 2026**. See [enacted vs announced measures](/technical-resources/glossary#enacted-vs-announced).
- **Commencement is not application.** Nothing substantive changes for a [CGT event](/technical-resources/glossary#cgt-event) happening **before 1 July 2027** — those gains keep the existing 50% discount for individuals and non-super trusts under new paragraphs 115-100(aa) and (ab).
- The [CGT discount](/technical-resources/glossary#cgt-discount) has **not been abolished**. Section 115-100 is **restructured**: from 1 July 2027 a resident individual or a non-super trust falls through to the new residual paragraph **(f) — 0%** on an ordinary asset, but **complying superannuation entities keep 33⅓%** under the unamended paragraph (b), which carries **no date limit**.
- Two carve-outs survive at a positive percentage: **new residential dwellings keep 50%** (s 115-102) and **eligible affordable housing keeps up to 60%** (s 115-125). **Companies are unaffected** — they never had a CGT discount to lose.
- The replacement relief is **cost-base indexation** (s 110-36(1A)) — available only to **individuals and trusts**, only for **CGT events on or after 1 July 2027**, and only where **Division 114** is met (the 12-month rule, and the s 114-25 residency requirement for individuals). It does **not** extend to new residential dwellings or affordable housing (s 114-30).
- The mechanical point most commentary misses: **indexation runs only from 1 July 2027, not from the date you bought the asset.** Section 960-275(1B) indexes only expenditure incurred **on or after 1 July 2027**, and Subdivision 112-E deems a sale and reacquisition **just before** that date, so the reacquisition cost is treated as 1 July 2027 expenditure.
- Indexation may **reduce** a capital gain, but it **cannot create or increase a capital loss** (s 100-40(2)).
- At 13 July 2026, **no ATO administrative guidance on Schedule 1 had been published**, and the legislative instrument that defines a "new residential dwelling" **had not been made** — so what qualifies for the surviving 50% discount cannot presently be stated.