Under the tax changes enacted in June 2026, most property investors lose the 50% capital gains tax (CGT) discount for CGT events on or after 1 July 2027, and a new minimum tax of 30% applies to their gains. New residential dwellings are carved out of both of those changes. A “CGT event” is the trigger for capital gains tax — most commonly the sale of an asset.

The carve-out does two things, and both sit in the enacted Act:

It keeps the 50% discount. A gain on a new residential dwelling can still be discounted by 50%, at a time when that discount is ending for other individual investors. It sits outside the 30% floor. The new Division 119 minimum tax does not reach a new-residential-dwelling gain.

There is one honest limit, and this guide is upfront about it. What counts as a “new residential dwelling” for the carve-out is set by a ministerial legislative instrument that had not been registered as at July 2026. So the carve-out exists and its effect is clear — but the exact eligibility boundary is not yet defined, and this guide does not guess at it.

How does the new residential housing carve-out work from 1 July 2027?

Start with the default the carve-out is an exception to. Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49 of 2026), which received royal assent on 26 June 2026, three things change for CGT events on or after 1 July 2027: the 50% discount ends for individuals, trusts and partnerships; CPI (consumer price index) indexation of the cost base returns in its place; and a new Division 119 sets a minimum 30% tax on residential and non-residential capital gains.

New residential dwellings are treated as an exception on two of those three fronts:

From 1 July 2027	Most individual investors	New residential dwellings
50% CGT discount	Ends	Retained (s115-102)
30% minimum tax (Div 119)	Applies	Excluded

The first row is the retained discount. Section 115-102 of the amended law keeps the 50% CGT discount available for new residential dwellings, even though it is being removed for other individual investors. The discount works the same way it does today: an Australian resident individual who has held the asset for at least 12 months can reduce the taxable gain by 50%, after any capital losses are applied first.

The second row is the Division 119 exclusion. Division 119 is the new 30% minimum tax — a floor, not a flat rate, that tops up the tax on a covered gain so it is not taxed below 30%. The floor only reaches a gain where section 115-102 does not apply (section 119-5). Because a new-residential-dwelling gain is exactly the case where section 115-102 does apply, that gain falls outside the floor.

So the carve-out leaves new-residential-dwelling gains on the pre-2027 footing — the 50% discount — rather than moving them onto the returning indexation-plus-floor footing that applies to everyone else. Whether that produces a lower tax bill in any particular case depends on the numbers, including how long the asset was held and how much prices moved. That is a calculation for a registered tax agent, not a general rule.

Two related carve-outs sit alongside it, though they are not the subject of this guide. The same reform keeps discount treatment for property that qualifies as affordable housing, and complying super funds keep their existing 33.33% discount unchanged.

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

What counts as a “new residential dwelling”?

This is where the honesty is needed. The Act creates the carve-out, but it does not itself spell out what a “new residential dwelling” is. It hands that job to the Minister: under section 26-160(4), the Minister must, by legislative instrument, determine the requirements a dwelling has to meet. Until that instrument is registered, the precise boundary is not published.

As at July 2026, no such instrument had been made. The Federal Register of Legislation showed zero legislative instruments registered under Act No. 49 of 2026, including the section 26-160(4) determination. So the questions a reader most wants answered — exactly which dwellings qualify, and for how long a dwelling counts as “new” — do not yet have a published answer.

As at July 2026, no such instrument has been registered on the Federal Register of Legislation, so the precise definition is not yet knowable — check the Register before relying on it.

That same “new residential dwelling” concept does a lot of work across the reform. The identical definition governs three separate carve-outs at once: the exemption from the new negative-gearing quarantine, the retained 50% CGT discount, and this Division 119 exclusion. When the section 26-160(4) instrument is registered, it will settle the boundary for all three in one go — which is a reason to wait for the actual text rather than to fill the gap from assumptions.

Because the boundary is unpublished, this guide does not state that any particular kind of property — an off-the-plan apartment, a newly built house, a substantially renovated dwelling — is or is not inside the carve-out. Those are exactly the calls the instrument will make. A registered tax agent can track it as it is registered and apply it to a specific property.

Does the carve-out mean a new dwelling is a better buy?

Not as a general proposition, and this guide does not read it that way. The carve-out is a feature of how the law taxes certain gains — it is not a signal to buy, sell, or time anything. Tax treatment is one factor among many in a property decision, and usually not the largest.

A few things sit against treating the carve-out as a reason to act:

• The eligibility boundary is unpublished. With the section 26-160(4) definition unmade, whether a given property even qualifies is not yet knowable.
• The discount is about the gain, not the purchase. The retained 50% discount only matters at a future CGT event — a sale — that may be years away and under settings that could themselves be revisited.
• Tax is not the whole picture. Price, location, rental prospects, holding costs and your own plans all bear on a property decision independently of CGT.

Whether a new dwelling suits your circumstances is a question for you and a licensed professional who can model your actual position — not something a carve-out settles on its own. Which set of CGT rules applies to a future sale depends on when the CGT event occurs, and that is a fact about dates, not a prompt to bring a decision forward or push it back.

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

How does the carve-out apply to Brix?

It cannot simply be read across, and the reason is the kind of asset a Brix is. A Brix is a fractional economic interest in a property — a financial product under Chapter 7 of the Corporations Act 2001, not ownership of the property itself and not a loan. Each property is divided into 10,000 Brix representing all of its economic benefits, and the owner remains the registered legal owner of the home.

Here is the limit, stated plainly. The enacted settings — the end of the 50% discount, the return of indexation, the Division 119 floor and the new-dwelling carve-out from it — are written for capital gains generally. As at July 2026, no ATO guidance and no registered legislative instrument sets out how those settings apply to fractional or indirect interests in residential property. So this guide does not state that a Brix connected to a new-build home is inside the carve-out, nor that it is outside it — neither has been published, and the point is doubly unsettled here because the “new dwelling” definition itself is not yet made.

The reliable path is to confirm a specific position against the MyBrix Product Disclosure Statement and with a registered tax agent, rather than reading the general carve-out as though it maps neatly onto a fractional interest. Under the MyBrix PDS current as at July 2026 (version 4.0), investors pay no fee to open an account, no fees to purchase or hold Brix, and no stamp duty on purchase.

Where this leaves investors

Two things are settled, and one is not. It is settled that a carve-out exists, that it keeps the 50% discount for new residential dwellings (section 115-102), and that it puts those gains outside the Division 119 minimum tax. It is not settled what a “new residential dwelling” is — that waits on the section 26-160(4) instrument, unregistered as at July 2026.

Good records make any of this easier to apply later. The ATO requires property CGT records to be kept for the whole period you own the asset, plus at least 5 years after you dispose of it — a clear record of what a property cost, and what it was worth at key dates, leaves you ready to apply whichever rules turn out to govern a future sale.

Beyond that, a specific property is a question for a professional. A registered tax agent can apply the carve-out — and track the new-dwelling definition as it is registered — to your circumstances.

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

For the fundamentals underneath all of this — how a capital gain is calculated, what the cost base includes, and how the main residence exemption works — see our guide to capital gains tax on property in Australia. The end of the discount and what replaces it, and the Division 119 minimum tax, each have their own explainer for the detail this guide leaves out.