The largest change to capital gains tax since the discount was introduced in 1999 takes effect on 1 July 2027. From this date, the 50 per cent CGT discount for individuals and trusts gives way to cost base indexation and a 30 per cent minimum tax rate, and negative gearing narrows to new builds for property acquired after Budget night.

Property owners also face Victoria’s expanded vacant residential land tax, and a draft ATO determination that could remove the main residence exemption for some inherited homes. Decisions made in the next nine months, about structure, timing and estate documents, will set the tax outcome for years afterwards. The strategies below set out where to start.

Not sure where you stand? Work through our five-minute property and estate planning checklist to see which changes affect you and what to raise with your adviser.

Review your portfolio and property structures

• Assess how Victorian land tax affects your holdings, especially if you own multiple properties or a holiday home. The lower $50,000 threshold and the COVID debt levy, both in place since 2024, have brought many more owners into the system.
  
• Check whether vacant residential land tax (VRLT) applies to you. From 1 January 2026, VRLT also captures land in metropolitan Melbourne that is capable of residential development but has remained undeveloped for five years or more.
  
• Be aware of the ATO’s ruling TR 2026/1 Income tax: rental property income and deductions for individuals who are not in business, which sets out how deductions are treated for properties that are short-term rented or also used as a holiday home.
  
• Consider whether your current ownership structure remains tax-effective and fit for purpose under the new rules. That means asking whether the property is held individually, through a trust or company, or in a self managed super fund. The CGT indexation changes apply to individuals, trusts and partnerships, not to companies or super funds.
  
• If you are planning your estate, be aware that leaving multiple properties to one beneficiary can push them into higher land tax brackets. Explore alternative structures to manage this risk.
  
  

Plan for CGT impacts and the timing of any sales

• The first stage of the CGT and negative gearing reforms is now law. From 1 July 2027, the 50 per cent CGT discount for individuals, trusts and partnerships will be replaced with cost base indexation and a 30 per cent minimum tax rate on capital gains.
  
• Only gains accruing after 1 July 2027 are taxed under the new rules. Accurate cost base records and valuations will be essential for separating gains made before and after that date.
  
• Owners of new residential dwellings can choose to keep the 50 per cent CGT discount rather than move to indexation.
  
• From 1 July 2027, negative gearing will only apply to new residential builds for property acquired after 7:30pm AEST on 12 May 2026. Properties held before that time keep their existing negative gearing treatment.
  
• The second stage of the legislation is still in Treasury consultation. It includes how the rules apply when property transfers on death or relationship breakdown, and how a “new residential dwelling” is defined. Watch this closely if you are planning an estate or a transfer.
  
• If you’re considering restructuring, gifting or selling property, seek professional advice early to understand the potential tax impacts and avoid unforeseen liabilities.
  

Manage vacant property and estate administration

• Vacant property taxes may apply if a property sits empty during estate administration. Check state-specific rules and deadlines. In Victoria, VRLT notifications are due by 15 February each year.
  
• The ATO’s draft determination TD 2026/D1 sets out its view of when someone has a “right to occupy the dwelling under the deceased’s will” for the CGT main residence exemption. Under the draft view, a right to occupy granted through a trustee’s discretion under a testamentary trust may not qualify.
  
• TD 2026/D1 is still in draft. The ATO proposes it apply to income years both before and after its final issue date, so existing Wills could be affected. Executors and beneficiaries should seek advice on how the Will is drafted before making decisions about the property.
  

Update your Will and estate planning documents

• Check your Will is up to date, reflects your wishes, and has appropriate executors.
  
• Ensure your Will reflects current property values and the latest tax laws. A Will written many years ago may no longer suit your circumstances.
  
• If your Will places the family home in a testamentary trust, have it reviewed in light of TD 2026/D1.
  
• Regularly review trust deeds, vesting dates and SMSF property strategies to ensure compliance with updated regulations.
  
• For superannuation, check and update beneficiary nominations to ensure your wishes are carried out and tax outcomes are optimised.

Strengthen tax governance and seek specialist advice

• Maintain complete records for all property and estate transactions, including cost bases and trust documentation.
  
• Engage with legal, tax and financial advisers regularly to review your strategy and ensure compliance with evolving rules.
  
• Beware of schemes that promise tax advantages but may be treated as avoidance arrangements by the ATO.
  

Next Steps

Start the property and estate planning checklist

As the property and estate planning landscape continues to change, staying informed and acting early matters more than ever. Regularly reviewing your property portfolio, updating your estate documents and seeking specialist advice will help you manage risk and take advantage of new opportunities.

If you’d like to discuss how these changes affect your plans, contact our Private Client Services team on info@au.Andersen.com or (03) 9939 4488

©Andersen Australia Pty Ltd. All Rights Reserved. Andersen is the Australian member firm of Andersen Global, an association of legally separate, independent member firms located throughout the world providing services under their own name or the brand “Andersen,” “Andersen Tax,” “Andersen Tax & Legal,” or “Andersen Legal.” Andersen Global does not provide any services and has no responsibility for any actions of the member firms, and the member firms have no responsibility for any actions of Andersen Global. No warranty or representation, express or implied, is made by Andersen, nor does Andersen accept any liability with respect to the information and data.