"A real sting in the tail" — the rules of investing have been rewritten

The Labor Government argues these changes restore fairness by ensuring investors "only pay tax on their real capital gain." But the modifications will fundamentally reshape how Australians build wealth — and the implications extend far beyond property.

1. Capital gains tax: the end of the 50% discount

The centrepiece reform replaces the longstanding 50% CGT discount with an inflation indexation method. Under the new regime, your cost base is adjusted for inflation using the Consumer Price Index — meaning you only pay tax on the real capital gain, not the nominal one.

On the surface, this sounds reasonable. But there's a catch: the government will also introduce a 30% minimum tax on capital gains from July 2027, regardless of your marginal tax rate.

2. Negative gearing: new builds only

From July 2027, negative gearing will be limited to newly constructed dwellings. Buyers of established properties will only be able to offset rental losses against other rental income — not against their salary or wages.

"Many shall be restored that now are fallen, and many shall fall that now are in honour."

BENJAMIN GRAHAM, AS QUOTED BY STEVE JOHNSON

The property sector has been bracing for this. But the ripple effects extend further than most realise — capital may redirect toward equities, superannuation, and other growth assets.

3. Discretionary trusts: the 30% minimum

From July 2028, distributions from discretionary trusts to beneficiaries aged 18 and over will face a 30% minimum tax rate — effectively eliminating one of the most widely used wealth-planning structures in Australia.

For investors with long time horizons, the message is clear: adaptability matters more than ever. The rules have changed, and the strategies that served the last two decades may not serve the next two.