The latest tranche of the budget tax legislation<\/a> is filled with terms such as \u201cpost-start cost base\u201d and \u201cpre-start reduced cost base\u201d. <\/p>\n In a nutshell, it means that investors will effectively average out gains over a property\u2019s entire holding period, with a \u201cdeemed sale\u201d on June 30 next year <\/a>splitting their capital gains tax treatment between the current 50 per cent CGT discount method and a new inflation-linked indexation method<\/a> from July 1.<\/p>\n CPA Australia tax lead Jenny Wong said while a formula-based split instead of requiring formal valuations is a sensible way to reduce compliance costs for taxpayers, it is \u201conly fair if it reflects reality\u201d.<\/p>\n \u201cAustralians whose asset did most of its growing before 1 July 2027, then flattened, will be disadvantaged under the apportionment methodology,\u201d she said.<\/p>\n \u201cTheir gain genuinely accrued in the CGT discount era \u2013 but the formula assumes it accrued evenly and pushes a slab of it into the new higher-taxed regime.<\/p>\n \u201cA method meant to spare ordinary taxpayers the cost of a valuation can leave them paying more tax than someone who could afford professional advice and chose a valuation instead.\u201d<\/p>\n Professional valuations typically cost $300-$600 for standard properties, but can be more than $1000 for larger or more complex real estate assets.<\/p>\n The biggest losers will potentially be property investors in Perth, Brisbane, and Adelaide, where home values have jumped 92.9 per cent, 78.6 per cent and 76.9 per cent respectively over the past five years, according to PropTrack data.<\/p>\n For example, consider an investor who has a $1m property at June 30 next year, and enjoyed a 75 per cent gain over the preceding five years after buying it for $572,000. <\/p>\n If they hold that property for another five years, it grows at annually at just 3 per cent a year and inflation is also 3 per cent a year, their net gain over the five years under the new CGT regime is zero.<\/p>\n However, if they do not get a valuation on the property and instead use the government apportionment method, half of their $428,000 earlier capital gain gets included in their CGT calculation for the period after July next year, despite the property achieving no real capital growth during the second five-year period.<\/p>\n This means potentially $214,000 added to their taxable income in the year of sale, along with $112,000 from the previous CGT discount method \u2013 for a total of $326,000 of extra taxable income.<\/p>\n If their entire $428,000 gain was calculated under the current 50 per cent CGT discount system, just $214,000 would be added to their taxable income.<\/p>\n The new rules mean that without a professional valuation, extra tax payable by the investor would top $52,600.<\/p>\n Financialadvisor.com.au principal James Gerrard said getting a formal valuation is preferred because the Australian Taxation Office has more power to reject retrospective valuations. However, finding a valuer may be tough, he warned.<\/p>\n \u201cThere are less than 10,000 registered valuers and nobody, including Treasury, has published how many assets will need valuing, though estimates suggest it could exceed five million business, trust and property assets,\u201d he said.<\/p>\n Investors who hold shares, ETFs, managed funds, cryptocurrencies and other assets where prices are posted on stock exchanges and other markets daily do not have to worry about professional valuations or apportioning of capital gains, because they have concrete prices to use for their CGT calculations.<\/p>\n The latest tranche of legislation also extends the time a dwelling can be considered new \u2013 where investors can still use the 50 per cent CGT discount method after July 2027 if they wish \u2013 if it is bought within two years of a certificate of occupancy being issued. The original legislation allowed just one year.<\/p>\n This move has been welcomed by accountants as better reflecting how developments are bought and sold, and it gives builders and developers more time to sell in a difficult market.<\/p>\n Anthony Keane writes about personal finance for News Corp Australia mastheads, focusing on investment, superannuation, retirement, debt, saving and consumer advice. He has been a personal finance and business writer or editor for more than 20 years, and also received a Graduate Diploma in Financial Planning.<\/p>\n","protected":false},"excerpt":{"rendered":"5:00AMAugust 06, 2026. Updated\u00a05:11AMAugust 06, 2026 The Australian Business Network Mum-and-dad property investors face paying tens of thousands…\n","protected":false},"author":2,"featured_media":67173,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[85063,84995,85074,85019,85045,84988,85085,84992,85097,85061,42406,5859,85081,85016,85087,161,41370,42915,48501,85043,85091,85032,85067,85071,85003,40880,85051,85047,85048,85006,85005,85033,85052,42704,85013,37929,85089,38541,84996,85021,37834,36934,85000,57551,45160,22,23,7458,21,99,11671,85054,36917,85027,85064,85079,85038,85022,85068,84998,52431,21034,14126,85042,85065,85095,85024,85014,85012,85028,85017,84997,85046,55991,1762,5957,84989,85070,38590,85055,47023,38688,85083,85039,156,84999,15150,85086,85030,85090,85040,80212,85035,84157,85077,8760,1012,85010,85034,47236,85076,85044,85023,84994,85036,335,84991,85009,2079,85073,85060,85041,85004,24104,8776,85078,38903,85056,22269,12068,85059,85094,85072,85057,53092,85084,45184,57869,39506,85096,70463,85008,65079,85049,85066,85075,85031,85058,38710,37024,55028,85093,42568,74083,85082,85020,59454,84993,85026,85069,36914,43547,48599,85001,85007,37445,85025,36556,38650,85080,85053,85018,85062,85015,84990,85037,85002,85011,85088,6016,85029,85092,85050],"class_list":["post-67172","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-s-2-3-million-residential-real-estate-investors","tag-s-approved-methodology","tag-s-cgt-rules","tag-s-deliberate-plan","tag-s-entire-holding-period","tag-s-favoured-method","tag-85085","tag-84992","tag-85097","tag-85061","tag-42406","tag-5859","tag-000-earlier-capital-gain","tag-000-gain","tag-000-registered-valuers","tag-161","tag-41370","tag-42915","tag-48501","tag-600-shadow","tag-76-9","tag-78-6","tag-92-9","tag-a-deemed-sale","tag-a-1m-property","tag-a-75","tag-a-dwelling","tag-a-formal-valuation","tag-a-formula-based-split","tag-a-method","tag-a-new-inflation-linked-indexation-method","tag-a-nutshell","tag-a-professional-valuation","tag-a-property","tag-a-sensible-way","tag-a-series","tag-a-slab","tag-a-total","tag-a-valuation","tag-a-valuer","tag-a-year","tag-an-investor","tag-and-adelaide","tag-another-five-years","tag-assets","tag-au","tag-australia","tag-australians","tag-austrlia","tag-brisbane","tag-capital-gains","tag-capital-gains-tax-valuations","tag-cent","tag-cent-cgt-discount-method","tag-cent-cgt-discount-system","tag-cent-gain","tag-compliance-costs","tag-concrete-prices","tag-costly-choice","tag-cryptocurrencies","tag-dollars","tag-estimates","tag-etfs","tag-extra-capital-gains-tax","tag-extra-cgt-the-federal-government","tag-extra-dollars","tag-extra-tax","tag-extra-taxable-income-if","tag-financial-landmines","tag-five-million-business","tag-formal-valuations","tag-gains","tag-home-price-growth","tag-home-values","tag-inflation","tag-investors","tag-its-growing","tag-its-own-tax-changes","tag-july","tag-july-1-cpa-australia-tax-lead-jenny-wong","tag-july-2027","tag-june-30","tag-just-214","tag-just-3","tag-labor","tag-larger-or-more-complex-real-estate-assets-the-biggest-losers","tag-legislation","tag-less-than-10","tag-managed-funds","tag-more-capital-gains-tax","tag-more-power","tag-more-tax","tag-more-than-1000","tag-mr-wilson","tag-mum-and-dad-landlords","tag-mum-and-dad-property-investors","tag-new","tag-new-cgt-rules","tag-news24-host-sharri-markson-financialadvisor-com-au-principal-james-gerrard","tag-next-year","tag-no-professional-valuation","tag-no-real-capital-growth","tag-ordinary-taxpayers","tag-other-assets","tag-other-markets","tag-perth","tag-post-start-cost-base","tag-pre-start-reduced-cost-base","tag-prices","tag-professional-advice","tag-professional-asset-valuations","tag-professional-valuations","tag-professional-valuations-or-apportioning","tag-property-investments","tag-property-investors","tag-proptrack-data-for","tag-reality","tag-retrospective-valuations","tag-sale","tag-shares","tag-spending-hundreds-or-thousands","tag-standard-properties","tag-stock-exchanges","tag-strong-gains","tag-success","tag-such-a-scenario","tag-taxpayers","tag-tens-of-thousands","tag-terms","tag-that-property","tag-the-50","tag-the-apportionment-methodology","tag-the-australian-taxation-office","tag-the-budget-tax-changes","tag-the-budget-tax-legislation","tag-the-cgt-discount-era","tag-the-coming-years-the-latest-tranche","tag-the-controversial-widow-tax","tag-the-cost","tag-the-country","tag-the-current-50","tag-the-economic-damage","tag-the-five-years","tag-the-formula","tag-the-government-apportionment-method","tag-the-investor","tag-the-legislation","tag-the-new-cgt-regime","tag-the-new-higher-taxed-regime","tag-the-new-tax-regime","tag-the-pace","tag-the-past-five-years","tag-the-period","tag-the-preceding-five-years","tag-the-previous-cgt-discount-method","tag-the-property","tag-the-second-five-year-period-this","tag-the-time","tag-the-year","tag-their-428","tag-their-capital-gains-tax-treatment","tag-their-cgt-calculation","tag-their-cgt-calculations-the-latest-tranche","tag-their-entire-428","tag-their-gain","tag-their-net-gain","tag-their-taxable-income","tag-their-taxable-income-the-new-rules","tag-treasurer-tim-wilson","tag-treasury","tag-trust-and-property-assets","tag-wealthier-counterparts","tag-whose-asset"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/67172","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/comments?post=67172"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/67172\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media\/67173"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media?parent=67172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/categories?post=67172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/tags?post=67172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"'Financial](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/08\/9fe1985aee224f4f89c3b7e9e586c190.jpeg\")
<\/p>\n![\"Anthony](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/08\/d261276f-cac2-4e03-8dba-307e5c5d86ab.png\")
<\/a>Anthony Keane<\/a>Personal finance writer<\/p>\n