Should You Sell Investments Before 1 July 2027?
Australia’s proposed capital gains tax changes have created an obvious question for investors:
Should you sell investments before 1 July 2027?
It is a reasonable question. The 2026-27 Federal Budget says the Government plans to replace the 50 per cent CGT discount with a discount based on inflation and introduce a minimum 30 per cent tax on gains from 1 July 2027.
That sounds like a deadline. And in one sense, it is a planning deadline.
But it is not a simple instruction to sell.
For many investors, selling before 1 July 2027 could mean crystallising tax earlier than necessary, interrupting a long-term compounding plan, paying transaction costs, and creating reinvestment risk. For others, especially those sitting on large unrealised gains in a taxable portfolio, the date may be worth reviewing carefully with a registered tax adviser.
This article is not personal tax advice. It is a framework for thinking through the trade-offs before doing anything irreversible.
For the full investor summary, start with 2026 Federal Budget: What Australian Investors Need to Know. ETF investors can also read 2026 Budget and ETFs: What Australian Investors Need to Know About CGT Changes.
What is changing from 1 July 2027?
Under current rules, Australian resident individuals and some trusts can generally reduce a capital gain by 50 per cent when they sell an eligible CGT asset they have held for more than 12 months.
The proposed Budget changes would replace that 50 per cent CGT discount with cost base indexation for assets held longer than 12 months, plus a 30 per cent minimum tax on net capital gains.
In plain English:
- The current system broadly taxes half of an eligible discounted capital gain.
- The proposed system would adjust the cost base for inflation, then tax the real capital gain.
- The minimum tax rule is intended to stop investors from reducing tax on gains below 30 per cent in certain situations.
The Government says the CGT reforms will only apply to gains arising after 1 July 2027. Investors in new builds would be able to choose between the current 50 per cent discount and the new arrangements.
NAB’s Budget analysis adds an important practical point: the 50 per cent CGT discount would continue to apply to gains arising before 1 July 2027, giving investors an opportunity to realise capital gains under current rates before that date.
That is the reason investors are asking whether they should act before the changeover.
Why selling before 1 July 2027 might look attractive
Selling before 1 July 2027 may look attractive if you have a large unrealised capital gain and expect the new rules to produce a worse after-tax result for future gains.
For example, imagine you bought an ETF, share portfolio, investment property, or other CGT asset years ago and it has risen substantially. If you sell before the proposed start date, the gain may be assessed under the current CGT rules, assuming you meet the usual eligibility requirements.
That could matter if:
- you already planned to sell soon
- you want to simplify a portfolio
- you are rebalancing away from a concentrated position
- your income is temporarily lower before 1 July 2027
- you are concerned that future gains may be caught by the new minimum tax rule
The key phrase is already planned.
Tax can be a useful reason to review an investment. It is rarely a good reason, by itself, to abandon a sound long-term asset.
The hidden cost: you may bring tax forward
The biggest downside of selling early is simple: you may have to pay tax earlier.
That matters because tax paid today is money that can no longer compound inside your portfolio. Even if the future tax rules are less favourable, the benefit of deferring tax can still be powerful.
Suppose you sell an investment in June 2027 to lock in the current CGT discount. If you owe capital gains tax, that tax bill reduces the amount you have available to reinvest. If you instead held the asset for another 5, 10, or 20 years, that unpaid tax would remain invested during that period.
That does not mean holding is always better. It means the question is not simply:
Will the tax rate be higher later?
The better question is:
Is the value of acting before 1 July 2027 greater than the cost of paying tax earlier, transaction costs, and any change to my long-term plan?
For long-term investors, that second question is the one that matters.
Holding may expose future gains to the new rules
The other side of the trade-off is that holding through 1 July 2027 may expose future gains to the proposed new CGT rules.
Based on the Budget materials and NAB’s explanation, assets held before 1 July 2027 and sold after that date would effectively have their gains split:
- gains arising before 1 July 2027 would remain under current arrangements
- gains arising after 1 July 2027 would be calculated under the new indexation and minimum tax arrangements
That means 1 July 2027 may become a valuation date for existing investments.
For investors with assets that are easy to value, such as listed shares or ETFs, this may be relatively straightforward. For property, private businesses, or other less liquid assets, valuation and record-keeping could become more important.
This is another reason not to leave the issue until the last week of June 2027.
Transaction costs still matter
Selling is not free.
Depending on the asset, you may face:
- brokerage
- buy-sell spreads
- conveyancing or agent fees
- lender fees
- stamp duty on a replacement property
- valuation costs
- accounting fees
- time out of the market
These costs can eat into any tax advantage from realising gains early.
For listed ETFs or shares, the transaction cost may be modest. For investment property, selling and buying again can be expensive enough to overwhelm a tax-timing benefit.
There is also the behavioural cost. Once you sell, you need a plan for what happens next. Will you buy back the same asset? Move to a different asset? Hold cash? Wait for a better entry point?
That last option can quietly turn a tax decision into a market-timing decision.
Long-term compounding may matter more than tax timing
Tax planning is important. But for many FIRE-minded investors, the big engine is still time in the market, savings rate, asset allocation, and compounding.
A technically clever tax move can still be a poor investment move if it causes you to:
- sell a high-quality asset you would otherwise hold
- sit in cash too long
- increase portfolio churn
- take on a worse investment just for tax reasons
- lose focus on your broader financial independence plan
The right tax answer and the right investing answer need to be considered together.
For example, realising a gain may make sense if you were going to sell anyway, your position has become too concentrated, or your life plans have changed. It may make less sense if the only reason to sell is fear of future tax rules on gains that may not arise for many years.
Do not ignore your personal tax position
Two investors can own the same asset and face very different outcomes.
The answer may depend on:
- your marginal tax rate now
- your expected marginal tax rate after 1 July 2027
- whether you are close to retirement
- whether you receive income support
- whether the asset is owned personally, through a trust, or another structure
- whether you have carried-forward capital losses
- whether you plan to donate, gift, transfer, or restructure assets
- whether the asset is property, shares, ETFs, business assets, or something else
This is where broad online commentary becomes dangerous. A headline about “selling before the CGT changes” cannot know your cost base, your income, your future plans, or your ownership structure.
Before realising a major gain, speak with a registered tax agent or qualified financial adviser who can model your actual numbers.
A practical checklist before selling
If you are thinking about selling before 1 July 2027, slow the decision down and work through the numbers.
Start with these questions:
- Would I sell this investment if the tax rules were not changing?
If the answer is no, be careful. The tax tail may be starting to wag the investment dog.
- How much of my gain arose before 1 July 2027?
The proposed transitional rules are focused on gains before and after that date. Good records may matter.
- What tax would I pay if I sold before 1 July 2027?
Do not estimate this casually. Include your income, capital losses, Medicare levy implications, and any other relevant personal factors.
- What might I pay if I hold and sell later?
This requires assumptions about future growth, inflation, tax rates, and timing. It will not be perfect, but a rough model is better than guessing. You can start with our CGT discount vs indexation calculator.
- What are the transaction costs?
For property especially, selling costs can be large. For shares and ETFs, include brokerage, spreads, and time out of the market.
- What will I do with the money after selling?
A sale is not the end of the decision. It creates the next decision.
- Have I received personal tax advice?
For large unrealised gains, this is not optional. The proposed rules are complex, transitional arrangements matter, and legislation may change before it is final.
So, should you sell investments before 1 July 2027?
Some investors may choose to realise gains before 1 July 2027. That may be reasonable where the investment was already likely to be sold, the tax modelling supports it, and the decision fits the broader plan.
But selling purely because a tax rule is changing can be a costly mistake.
Selling early may crystallise tax sooner. Holding may expose future gains to the new rules. Transaction costs matter. Long-term compounding matters. Your personal tax position matters. And because the Budget changes still need to move through the legislative process, the final rules may differ from the first announcement.
The best approach is not panic-selling. It is planning.
Use 1 July 2027 as a prompt to review your portfolio, update your records, model your options, and get proper advice before making a major decision.