Yes — but only for part of the gain. A property bought before 20 September 1985 is a “pre-CGT” asset: it was acquired before capital gains tax began, so any gain on it has always been exempt. The changes enacted in June 2026 narrow that exemption going forward, not backward. From 1 July 2027, the gain that builds up on a pre-CGT property after that date is brought into the CGT net; the gain that built up before then keeps its exempt, pre-CGT treatment.

The rule that does this is one sentence:

A pre-CGT property stays exempt for gains up to 1 July 2027. Only the gain that accrues from 1 July 2027 onward is caught — section 112-175 of the amending Act.

This guide works through what counts as a pre-CGT property, what the enacted transition actually does to it, and where the detail is still being filled in.

Are pre-CGT properties subject to the 2027 CGT rules?

For the gain accruing from 1 July 2027, yes. Assets acquired before 20 September 1985 — the day CGT commenced — are pre-CGT and generally sit outside the CGT regime, so a gain on disposal is not taxed. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received royal assent on 26 June 2026, changes that for the future. Under section 112-175, the gain that accrues on a pre-CGT asset from 1 July 2027 comes into the CGT net (as at July 2026).

Two things do not change. The gain built up before 1 July 2027 keeps its pre-CGT treatment — the amending Act draws a line at the changeover rather than taxing the whole history of the asset. And the exemption was never absolute even before the reform: the ATO’s list of CGT assets and exemptions explains that major capital improvements made to a pre-CGT property after 20 September 1985 can be treated as separate assets that are subject to CGT in their own right.

A “CGT event” is the trigger that crystallises a capital gain or loss — most commonly the sale of the asset. Which rules apply to that event depend on when it happens, which is the thread running through everything below.

Tax outcomes depend on your circumstances — speak with a registered tax agent before acting.

What is a pre-CGT property?

Capital gains tax started on 20 September 1985. An asset you acquired before that date is “pre-CGT”, and a gain on it is generally exempt — the tax simply does not reach gains on assets held from before the regime existed. For property, this most often means a home or investment property that has been in the family since before September 1985.

Pre-CGT status is not the same as being untouchable, though. As above, capital improvements made after 20 September 1985 — a substantial extension or rebuild, for instance — can form a separate CGT asset even while the original land keeps its pre-CGT character. The ATO’s guidance on CGT assets and exemptions sets out how that separation works. The point for 2027 is that the base asset itself, long exempt, is affected for the first time — but only from the changeover date forward.

How does the 2027 transition treat a pre-CGT property?

The mechanism is a deemed sale and reacquisition. For a pre-CGT asset you still hold on 30 June 2027, section 112-175 treats it as sold just before 1 July 2027 at its market value just before that date, and reacquired just after for the same amount. That is the enacted default, set in the primary law itself. Its effect is to fix a value at the changeover: everything up to that value is the exempt pre-CGT gain, and the post-changeover period is measured from that deemed reacquisition figure.

So the transition splits one asset into two tax periods:

Period	Broad treatment
Gain up to 30 June 2027	Pre-CGT — exempt
Gain from 1 July 2027	New rules apply

On the new side, once a gain is in the net it is taxed under the reform’s general settings (as at July 2026): the 50% discount ends for individuals, trusts and partnerships, CPI indexation of the cost base returns for most cost base elements, and a new Division 119 applies a minimum 30% tax to residential and non-residential capital gains, with new dwellings excluded. Complying super funds keep the 33.33% discount. The ATO’s guidance on the reform and the amending Act carry the detail.

The Act also names an apportioning method, under section 112-185, as an alternative to that market-value default. What the enacted words leave open is how that alternative works: section 112-185 lets the Minister set the method by legislative instrument, and as at July 2026 none had been made — so exactly how apportionment would run for a pre-CGT asset, and when it would suit a holding better than the market-value default, is not yet on the public record. As at July 2026, no such instrument has been registered on the Federal Register of Legislation — check the Register before relying on this alternative.

What do the changes mean for records and a 30 June 2027 value?

Because the transition draws a line at market value just before 1 July 2027, the value at the changeover becomes the figure that separates the exempt period from the taxable one. Supporting that figure is a records question, not a call to action. A market value recorded around the transition is the kind of evidence that makes the split easier to substantiate later, in the same way the ATO already expects a value to be recorded when a property’s tax use changes.

The ordinary record-keeping rules do not change. As at July 2026, the ATO requires property CGT records to be kept for the whole period you own the property, plus at least 5 years after you dispose of it. For a pre-CGT property that has been held for decades, the records that matter most are often the ones establishing when it was acquired and what has since been spent on capital improvements.

None of this points to a single action for a particular reader. Which rules apply to a future sale depend on when the CGT event occurs, and complete records make whichever calculation applies easier to work through. The timing and value questions are ones to settle with a registered tax agent, not from a general guide.

How does this apply to fractional interests like Brix?

The rules above describe how the transition treats a CGT asset such as a directly held pre-CGT property. A Brix is a different kind of asset. A Brix is a fractional economic interest in a property — a financial product under Chapter 7 of the Corporations Act 2001 (Cth), not ownership of the property and not a loan — and the property owner remains the registered legal owner of the home.

As at July 2026, no ATO guidance and no registered legislative instrument set out how the 2027 transition — including the pre-CGT rules in section 112-175, the market-value changeover, or the section 112-185 apportionment method — applies to fractional or indirect interests in residential property. This guide does not fill that gap. How the transition treats a Brix is a question for a registered tax agent and for the Product Disclosure Statement, not something to infer from the rules for directly held property.

Under the MyBrix Product Disclosure Statement current as at July 2026 (version 4.0), each property is divided into 10,000 Brix representing all of its economic benefits — future net sale proceeds and, where applicable, net rental proceeds.

Where the detail will be confirmed

The transition is enacted law; the working detail — including the section 112-185 apportionment method and the valuation and apportionment mechanics for pre-CGT assets specifically — is being filled in through ATO guidance and legislative instruments that were still pending as at July 2026. The amending Act and the ATO’s guidance on the reform are the primary sources to watch, and a registered tax agent can confirm how any of it applies to a specific property.

For the CGT basics this builds on, see our guide to how capital gains tax is calculated on property.