IFPA raises concerns over major CGT changes

IFPA’s CGT consultant, Kirk Wilson, spoke on the changes, highlighting that it represented a major shift in the regulatory landscape, requiring careful preparation from all industry stakeholders.

“There will be much new CGT complexity for practitioners to come to terms with over the coming months before the measures take effect from 1 July 2027 and that this will no doubt add to compliance costs,” Wilson said. 

The IFPA has received the publication of a substitute approach for determining gains accrued before 1 July 2027 with some optimism, yet has expressed reservations regarding the "compounding daily growth rate" mechanism. 

Specifically, the association raised concerns about whether this apportionment model would accurately capture fluctuations in an asset's valuation over its holding period.

IFPA applauded the extension of the period that a dwelling can be treated as a “new residential dwelling,” from 12 to 24 months. 

Under the exposure draft, a new residential dwelling is one that adds to Australia's housing supply after 12 May 2026, including a dwelling built on vacant land, an additional dwelling created on land already containing homes, a dwelling converted from a non-residential building, or (within 24 months of its occupancy certificate) a qualifying resale of such a newly created dwelling. 

To qualify, the dwelling must meet the specified ownership and occupancy certificate requirements, and anti-avoidance rules prevent arrangements designed solely to have a dwelling treated as "new" for tax purposes. 

However, whilst acknowledging the draft's positive aspects, the association identified several technical areas requiring further clarification.

“There remain various concerns about the operation of these proposed provisions, including the rules for converting an existing building to a residential dwelling and how the anti-avoidance provisions will specifically apply,” Wilson said. 

Despite the proposed measures being subject to further consultation, many experts have noted that the current two-week consultation period is extraordinarily limited. 

Several accountants have said that meaningful consultation requires sufficient time for stakeholders to analyse the legislation, identify unintended consequences and develop constructive alternatives. 

“The current consultation period is only a little over two weeks; this seems somewhat inadequate for such complex and intricate changes,” Wilson said. 

Consultation closes on 21 August 2026.