Owners of an investment property may have been told that a valuation dated 30 June 2027 is required. That is not quite right. Whether you need one depends on how the property has been used, and on how the new capital gains tax (CGT) rules treat gains that built up before the changeover.
What the 1 July 2027 change does
From 1 July 2027, the current 50% CGT discount is set to be replaced for resident individuals and trusts. The new system is based on indexing the cost base, with extra rules applying to real capital gains.
The key point for owners is what does not change. Today’s treatment still applies to whatever portion of a profit built up prior to 1 July 2027. Only the growth after that date falls under the new regime.
That creates a practical problem. If you sell in 2032, how much of the gain is old and how much is new? The tax system needs a dividing line.
Why a 30 June 2027 valuation can matter
To draw that line, many assets held at 30 June 2027 will be deemed sold just before the start of July and bought back straight after. By default, the figure used is market value immediately before 1 July 2027.
So for many investment properties, a valuation at that point is the cleanest way to split the old gain from the new. It becomes your evidence when you eventually sell.
In some situations, an alternative apportionment approach may be allowed. The detail matters here, and the rules should be checked against your own circumstances rather than assumed.
Where the family home gets complicated
A main residence is usually the simple case. But a home that has earned income can end up with partial CGT exposure. That can happen when the owner:
- let the property out before moving in
- rented it out after moving out, without fully relying on the absence rules
- leased part of it, such as a spare bedroom or granny flat
- ran a business from part of it
If any of those describe your home, the 30 June 2027 date may matter more than you expect.
Key numbers
- 1 July 2027: start date of the new CGT system
- 50%: the current discount that is set to be replaced
- 30 June 2027: the likely valuation date for many assets held at that point
The catch: an earlier valuation date may apply
An existing rule already treats a main residence as acquired at market value when it first begins producing income. If that applies to your home, the relevant valuation date could be the day it first started earning income, not 30 June 2027.
That is the detail most owners miss. Two properties that look identical can need valuations at completely different dates, based purely on their history.
A simple way to work out where you stand
Start with the property’s history, not the calendar. Ask these questions:
- Is it a pure investment property held at 30 June 2027? A valuation at that date is likely the default route.
- Is it your main residence that has never produced income? You might not need to get a valuation done for 30 June 2027.
- Has it ever produced income, even partly? Check whether the earlier first-income rule applies, and review your position before the changeover.
The broader tax picture is covered in our guide to negative gearing, CGT and investor tax. On the deadline side, see our earlier piece on how the capital gains tax valuation deadline could cost investors thousands.
What to do before the changeover
The cost of getting this wrong is not a penalty this year. It is a harder, more expensive argument years from now, when you sell and cannot show what the property was worth at the dividing line. A valuation done late is harder to defend than one done on time.
So the practical step is a short review with your accountant or tax adviser well before July 2027. Confirm the property’s income history, work out which valuation date applies, and decide whether to commission a valuation.
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General info, not financial advice.
