The 30% Minimum Tax on Capital Gains: The Part of the CGT Reform Nobody Is Talking About

Most CGT reform coverage has focused on the end of the 50% discount. The change more likely to surprise property investors has had far less airtime: from 1 July 2027, capital gains carry a tax floor of 30%, and the people it hits are not the high earners most investors picture.

What is the 30% minimum tax on capital gains?

The first tranche of the CGT reform, the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, was enacted on 26 June 2026 (Jacobson, 2026). It introduces a minimum 30% tax for individuals on certain net capital gains accruing on or after 1 July 2027 (Australian Taxation Office [ATO], 2026).

It works as a top-up. The law identifies the part of your tax bill that relates to capital gains, compares it with the 30% minimum and charges any shortfall as extra tax (Wood et al., 2026). It is a floor, not a flat rate (Jacobson, 2026). If your marginal rate is already 30% or more, nothing changes (Young, 2026).

Does it apply to gains made before 1 July 2027?

No. Gains accrued on or before 30 June 2027 sit outside the minimum tax (Jacobson, 2026). Assets held on 30 June 2027 are deemed to be sold just before 1 July 2027 and reacquired at market value, which separates the two periods (Jacobson, 2026). The pre-2027 portion keeps the old rules, including the 50% discount where eligible (ATO, 2026).

Who does the minimum tax affect most?

Under the 2027-28 rates, income between $18,201 and $45,000 will be taxed at 14% (Castelyn, 2026). The floor matters when a large gain lands in a year with little other income. That typically means:

• Self-funded retirees selling an investment property in a low-income year, the clearest example of who it bites hardest (Young, 2026).
• Part-time workers, people on parental leave or between jobs who sell in a lean year.
• Couples where the lower-income partner owns the property. Holding an asset in the lower earner’s name has long reduced CGT. The floor narrows that advantage for future growth.

A worked example

Take an investor with $10,000 of other taxable income who realises a $60,000 indexed capital gain, all accrued after 1 July 2027. Using 2027-28 rates, and ignoring the Medicare levy and tax offsets, the gain adds roughly $11,250 in tax, an effective rate of about 19%. The 30% floor is $18,000, so the top-up is roughly $6,750.

These are our own calculations and only illustrate the effect. The statutory method is more detailed.

Is anyone exempt?

Yes. Recipients of the Age Pension and other income support payments are exempt from the minimum tax (BDO Australia, 2026). They do not need to be receiving the payment before the sale; qualifying at any point in the same financial year is enough (Ly, 2026).

Restructuring your finances just to qualify is harder than it sounds. A University of Tasmania tax academic points to strict means testing, gifting rules and general anti-avoidance provisions, and expects few retirees to make it work (Castelyn, 2026).

The Government has also announced a separate 30% minimum tax for discretionary trusts from 1 July 2028, which is still in consultation (Ly, 2026). Moving assets into a family trust is not a simple way around the floor.

What should property investors do now?

• Map your likely sale year. The floor bites hardest when sale proceeds arrive in a low-income year. Plan retirement timing and sale timing together.
• Rethink ownership at purchase. The case for buying in the lower earner’s name is weaker for post-2027 growth. Get structuring advice before you sign a contract.
• Document the 1 July 2027 value. A defensible market value at that date separates growth taxed under the old rules from growth exposed to the floor.
• Expect more detail. How gains distributed through trusts and managed funds will be handled is still unresolved (Young, 2026).

Frequently asked questions

What is the minimum tax on capital gains in Australia? From 1 July 2027, individuals pay at least 30% on certain capital gains accruing after that date, with a top-up charged where normal rates fall short.

Are pensioners exempt from the 30% minimum tax? Yes. Age Pension and other income support recipients are exempt from the minimum tax, though the rest of the CGT reform still applies.

This article is general information only and is not tax or financial advice. Speak to a registered tax agent about your situation.