Expats to Lose CGT Indexation Relief on Investment Properties Under Approaching 2027 Federal Tax Reform

Summary

A major legislative overhaul taking effect on July 1, 2027, will eliminate the standard 50% Capital Gains Tax (CGT) discount in favour of a 30% flat tax combined with a new inflation indexation regime. However, participants warn that eligibility rules are unforgiving: any individual classified as a foreign resident or temporary resident for tax purposes at any point during the asset's holding period after the rollout date will be entirely disqualified from using the indexation adjustment. Landlords moving abroad must urgently assess their residency timelines to avoid full exposure to the new 30% minimum rate.

Key Points

Why it matters: Alerts Australian expats or property owners planning to work overseas about a critical tax rule change coming into effect on July 1, 2027, preventing massive unforeseen Capital Gains Tax liabilities.

A major legislative overhaul taking effect on July 1, 2027, will eliminate the standard 50% Capital Gains Tax (CGT) discount in favour of a 30% flat tax combined with a new inflation indexation regime. However, participants warn that eligibility rules are unforgiving: any individual classified as a foreign resident or temporary resident for tax purposes at any point during the asset's holding period after the rollout date will be entirely disqualified from using the indexation adjustment. Landlords moving abroad must urgently assess their residency timelines to avoid full exposure to the new 30% minimum rate.

Practical Takeaway

Use this note as a practical prompt before making decisions. Check the rules in your state, keep written records, and seek qualified advice where needed.