iscover 1 July 2027 CGT reset: valuation or formula? Run the numbers by client
TaxPick the market, property type and purchase year. The free calculator shows the tax under a 1 July 2027 valuation and Treasury's draft formula side by side, per client.
A client who bought a median Brisbane house in 2019 and sells it in 2030 pays about $52,800 more capital gains tax if they take Treasury's draft formula instead of a 1 July 2027 valuation. In Perth the gap is about $42,600, in Adelaide $39,500, in Sydney $35,200. In Melbourne the formula wins by about $6,300. Those figures come from our free capital gains tax calculator for Australian property, on its default assumptions: $135,000 of other income, CPI at 3 per cent, 4 per cent growth after the reset and ABS medians for each market. Change the inputs and the answers move. The point is that the answer is different for every client, and most practices have not yet worked out which clients sit on which side.
What changes on 1 July 2027
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 is law. From 1 July 2027 the 50 per cent discount for individuals, trusts and partnerships is replaced by CPI indexation of the cost base and a 30 per cent minimum rate. Every asset held across that date is treated as sold and reacquired at market value on 1 July 2027. Growth before that date keeps the old treatment. Growth after it is taxed under the new rules. The number that decides how much of each client's gain sits on either side is the 1 July 2027 market value, and the client chooses how to set it when they lodge for the year of sale.
Why the formula and the valuation give different answers
The alternative to a valuation is the apportioning method in Treasury's draft determination. It was released as an exposure draft in August 2026, consultation closed on 21 August, and as at the date of this article it has not been registered. The draft does not split a gain by time. It compounds one daily growth rate from the purchase price to the sale price and reads off an implied value at 1 July 2027. Compounding pushes growth towards the end of the holding period, so for a property that grew strongly before 2027 and slowly after, the formula understates the 1 July 2027 value and shifts gain out of the discounted period into the taxed one. That is the Brisbane and Perth pattern. Melbourne ran flat into the reset, so the formula lands above the real value and the client is better off without a valuation. The formula also ignores capital improvements, because it works from the first element of the cost base only.
CPA Australia and the FAAA have both asked Treasury to replace the compounding method with a simple days-held split. If that happens the direction of the result changes for many clients, which is the second reason to have a dated valuation on file: it keeps the choice open whatever the final instrument says.
How to triage a client list in an afternoon
Open the calculator. Pick the state and city, house or unit, the purchase year and the client's income. It shows the total tax with a valuation and with the formula, the difference in dollars, and a table of the same purchase in every Australian market so you can see where the client sits. Two minutes per property sorts the list into three groups: clients where a valuation clearly pays for itself, clients where the formula is fine, and clients close enough that the valuation is cheap insurance. The calculator is at cgtvaluation.com.au/cgt-calculator.
What a 1 July 2027 valuation involves
A 1 July 2027 value cannot be finalised before 1 July 2027. Orders placed now are prepared on the sales evidence at that date, from the first week of July 2027, so your clients' reports do not queue behind the market. Reports are desktop valuations prepared from the sales evidence and property data at the valuation date, signed by the valuer who prepared them: a Chartered Accountant, Registered Tax Agent (TPB 17532009) and Certified Property Valuer with the Australian Valuers Institute. Residential 1 July 2027 reports are $369 inclusive of GST for orders placed by 31 March 2027, then $395. Commercial reports are $695. Prestige, rural and specialised assets are quoted individually. Turnaround is 24 to 48 hours from receipt of the information we need, and several properties can be ordered on one instruction.
Start with the calculator at cgtvaluation.com.au/cgt-calculator, then book at cgtvaluation.com.au/1-july-2027-cgt-valuation. Accountants ordering for several clients can find briefing notes and firm ordering at cgtvaluation.com.au/property-accountants.
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