Capital gains tax (CGT) is getting a lot of airtime again largely because the CGT discount and housing affordability have returned to the centre of political and economic debate. Several major outlets have reported that CGT settings may be part of the policy conversation heading into the May 2026 Federal Budget, although no change has been confirmed.
CGT applies when you sell an asset (such as shares, investment property, or a business asset) for more than its cost base. Under current rules, many Australian residents can reduce the taxable capital gain by 50% if the asset has been held for at least 12 months.
Why is it in the news right now?
Two big drivers are being discussed publicly:
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Housing and inequality: CGT concessions are frequently raised in debates about investment incentives and who benefits most.
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Budget repair / tax reform agenda: Treasurer Jim Chalmers has said the May Budget will focus on productivity, spending restraint and tax reform — and has left the door open on CGT reform (without committing to changes)
If CGT changes were announced, the key questions typically become:
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Start date (when changes take effect)
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Transitional rules (e.g., grandfathering existing assets vs applying to future purchases only)
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Which assets are affected (property, shares, trusts, small business CGT concessions, etc.)
Right now, this is still speculation. The sensible approach is preparation rather than panic:
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If you’re considering selling an asset in the next 6–18 months, ask for a CGT estimate under today’s rules and a scenario model under “possible reform” settings.
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Make sure your cost base records are clean (purchase documents, improvement costs, selling costs).
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If you use trusts or companies, review how capital gains typically flow through your structure.
