Your home and 30 June 2027: is it affected by the CGT changes?

Is my home affected by the CGT changes in 2027?

Generally not, if it has been your main residence (the home you live in) for the whole time you have owned it: the Australian Taxation Office (ATO) says the main residence exemption from capital gains tax (CGT), the tax on the gain when you sell an asset, is not changing (ATO, Capital gains tax reform).

The law disregards a gain on a dwelling that was an individual's main residence throughout their ownership (Income Tax Assessment Act 1997, or ITAA 1997, s 118-110). The ATO adds Australian residency, no use of the home to produce income and land of 2 hectares or less (ATO, eligibility). Then there is generally no CGT when you sell, before or after 30 June 2027.

Where a gain is taxable, 30 June 2027 matters. Property an individual still holds on 1 July 2027 is generally treated as sold just before that date and bought back at its market value (its open-market price), called the deemed sale. Only the part of the gain that built up to 30 June 2027 generally keeps the 50% discount (ITAA 1997 ss 112-155, 112-160, 115-100).

What if I rented out or moved out of my home?

A former home can stay exempt for a time, but periods outside the exemption can be taxed, so a 30 June 2027 value may be useful.

• Six-year choice. After moving out, you can choose to keep treating it as your main residence for up to six years per absence while it earns income such as rent, or indefinitely if it earns none, but generally no other home can then be your main residence (ITAA 1997 ss 118-140, 118-145; ATO, former home).
• Partly exempt. If it was your main residence for only part of your ownership, such as a former rental you later moved into, generally the gain is taxed in proportion to the days it was not (s 118-185).
• First used to earn income after 20 August 1996. If it was your main residence from when you bought it until it first earned income, and it is only partly exempt because of that income use, you are treated as buying it at its market value on that day (s 118-192).

What if I sell while a foreign resident?

The main residence exemption generally does not apply if you are a foreign resident (not an Australian resident for tax) when you sell, unless you pass the life events test: a continuous period of six years or less as a foreign resident plus a listed event, such as a terminal medical condition or a sale under a formal agreement after a relationship breakdown (ITAA 1997 ss 118-110(3) to (5), 995-1; ATO, foreign residents).

Residency also matters at 30 June 2027: under current law, an individual's deemed sale does not apply if, broadly, you were a foreign or temporary resident (mainly temporary visa holders) at any time after 8 May 2012 while owning the property (ss 112-155(1)(d), 115-105). The Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 would instead apply it to people who were Australian residents for any part of their ownership; it is not law (Bill, Schedule 4 item 20; Parliament of Australia).

Is a holiday home exempt?

Usually not while another home is your main residence: generally only one home can be your main residence at a time, apart from up to six months when moving (ITAA 1997 ss 118-140, 118-145(4); ATO, moving house). So a holiday home an individual still owns on 1 July 2027 generally gets the deemed sale like any other taxable property (s 112-155). One bought before 20 September 1985, when CGT began, gets its own deemed sale, so gains that build up from 1 July 2027 can be taxed (s 112-175; ATO, Capital gains tax reform).

What about a new home?

A new residential dwelling that meets the law's tests sits outside the deemed sale and can keep the 50% discount, but what counts as new is not settled.

For individuals (foreign and temporary residents aside), a gain on one sold from 1 July 2027 can keep the 50% discount unless indexation (an inflation adjustment to the cost) is chosen (ITAA 1997 ss 112-155(1)(e), 115-100(a), 115-102).

Under current law the test is left to requirements the Minister sets by legislative instrument (s 26-160(3), (4)), and we found no such instrument on the Federal Register of Legislation at 24 October 2026. The Tax Reform No. 3 Bill (not law) would write the test into the Act: broadly, a certificate of occupancy (confirming a home is fit to live in) first issued at or after 7.30 pm Canberra time on 12 May 2026, with a later buyer able to qualify within 24 months of it (Bill, Schedule 5 item 4, proposed s 960-590; Parliament of Australia). Ask your accountant.

What can I do now?

Unless you sell first, there is nothing to report yet. The ATO says you generally don't need the 30 June 2027 market value for your 2026-27 return, but that for most assets, including real estate, it will need to be established when you later sell, unless the apportioning method can be used (ATO, Capital gains tax reform).

• The ATO said on 19 October 2026 that a 30 June 2027 valuation should not be obtained before that date, as it can't be forward-looking, and is not required to be in place on the day (ATO, CGT reform guidance and market valuations).
• The law lets the Minister make a formula (an apportioning method) to use instead of a market value. None had been made at 24 October 2026; an August 2026 draft would cover real property (ITAA 1997 s 112-185; Treasury consultation c2026-792170).
• Ask your accountant whether a 30 June 2027 value may be useful for your home.

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