Treated as sold and bought back: the 30 June 2027 deemed sale explained

What is the 30 June 2027 deemed sale?

It is a rule that treats an asset you still hold as sold just before 1 July 2027 and bought back straight away, normally at its market value, though nothing changes hands (ITAA 1997 ss 112-155, 112-165, 112-175).

It splits a gain in two, because the 50% capital gains tax (CGT) discount for individuals and trusts no longer applies to the part of a gain that builds up from 1 July 2027 (s 115-100). CGT is the tax on capital gains, such as a profit on selling property or shares; a net capital gain is added to your assessable income (s 100-10).

Who does it apply to?

Mainly individuals and trusts that acquired an asset before 1 July 2027 and still hold it at the end of 30 June 2027 (ss 112-155(1), 112-165(1)).

• Australian resident individuals. In broad terms, not if you were a foreign or temporary resident at any time after 8 May 2012 while you owned the asset (ss 112-155(1)(d), 115-105).
• Trusts, generally, provided at least one beneficiary could get the 50% discount on the trust's gain (s 112-165(1)(d)).
• Not a company's own assets, except pre-CGT assets (see below), though shares in a company held by an individual or family trust are generally covered (ss 112-155, 112-165).

What does "still held" mean?

The deemed sale applies only if you still hold the asset when a later CGT event, such as a sale, happens on or after 1 July 2027 (ss 112-155(1)(c), 112-165(1)(c)). The Act calls this a realisation event; most CGT events count, with a few exceptions (s 977-5).

For a sale, that event generally happens when the contract is made, not at settlement (s 104-10(3)). A Bill before Parliament, the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026, would narrow which later events count and change the residency condition; it is not law (Parliament of Australia).

Market value or the apportioning method?

The deemed sale price is market value just before 1 July 2027, unless an apportioning method has been made and you choose to use it (ss 112-155(3), 112-165(3), 112-175(3)).

That method is a formula the Minister may make by legislative instrument (s 112-185). It had not been made at 24 October 2026, and the August 2026 draft would cover only real property and assets without a readily ascertainable market value (Treasury consultation). Where a choice exists, it can wait until you lodge the tax return for the year of the later realisation event (s 112-155(4)). Compare both in a valuation or the apportioning method.

Is the gain from the deemed sale taxed?

Not on 30 June 2027: any gain or loss from it is set aside and counted in the income year of the later realisation event (ss 112-160, 112-170). That deferred gain can still get the 50% discount if the usual conditions are met (ss 112-160(3), 112-170(3)).

The ATO says that, generally, you do not need to know the market value to complete your 2026-27 tax return (ATO, CGT reform).

What is excluded?

Only a few assets are left out.

• New residential dwellings that meet the law's tests, and affordable housing, are left out where those special discount rules apply to the gain on the later sale (ss 112-155(1)(e), 115-102, 115-125). The ATO says owners can choose to keep the 50% discount for them.
• Pre-CGT assets, acquired before 20 September 1985, are not excluded, whoever owns them. They get their own deemed sale, which resets the starting point of their cost base (broadly what an asset cost plus certain other costs) to the deemed sale price (ss 4-5, 110-25, 112-175, 149-10).

Your home is a separate question: the ATO says there are no changes to the main residence exemption (ATO, CGT reform). See your home.

What does market value mean?

In plain words, it is the estimated price an asset would fetch on the open market at a set date: what a willing buyer and a willing seller would agree on in an arm's length deal, based on the asset's most valuable use (ATO, Market valuation of assets).

The Act often uses the term in this ordinary sense (s 960-400). ATO guidance adds that market value assumes no forced sale, ignores value special to one owner or buyer, and reflects the market on the valuation date, using information known or reasonably foreseeable then, not hindsight (ATO, Market valuation for tax purposes). The ATO says a valuation should be objective and supported with appropriate evidence.

Why might the value matter later?

Because one figure does two jobs: the sale price for the deemed sale and the starting cost base for the period from 1 July 2027 (ATO, 19 October 2026).

The ATO says that for most assets, including real estate, the market value just before 1 July 2027 will need to be established when you later sell, unless the apportioning method can be used (ATO, CGT reform). Indexation lifts the cost base for inflation, and for these assets runs only from 1 July 2027 (s 110-36(1A), note 4). Keep your purchase records, as the ATO asks.

Questions people ask

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