If you hold a property on both sides of 1 July 2027, the enacted 2027 rules do not ask you to guess how to split the gain. The law draws the line for you: an asset you still hold on 30 June 2027 is treated as sold at its market value just before 1 July 2027, and reacquired just after for the same amount. That single deemed sale-and-reacquisition splits your ownership into two eras — the gain built up before the changeover, taxed under the old rules, and the gain from the changeover on, taxed under the new ones.

The whole calculation turns on one rule:

An asset held on 30 June 2027 is treated as sold at market value just before 1 July 2027 and reacquired just after — so the gain up to that point keeps the old treatment, and the gain from that point on falls under the new rules. An apportionment method can be used instead (section 112-185).

That is the default the enacted law sets. The apportionment method named at the end is an alternative, and its detail was still being filled in as at July 2026 — so most of this guide describes the default split, which is set in the Act itself.

How does the split-era CGT calculation work for a property held across 1 July 2027?

On the enacted law as at July 2026, through a deemed sale and reacquisition at the changeover. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 — royal assent 26 June 2026 — applies to CGT events on or after 1 July 2027. A “CGT event” is the trigger that crystallises a capital gain or loss, most commonly the sale of an asset.

For a property you still hold on 30 June 2027, the enacted default (sections 112-155, 112-165 and 112-175, depending on the type of asset) 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. Two things follow from that one step:

• The gain built up to the changeover is measured against your original cost base and keeps its old treatment — the pre-1 July 2027 regime, including the 50% discount era.
• The gain built up from the changeover is measured against a fresh starting point: that market value becomes the first element of the cost base for the new era, and the gain on top of it falls under the new rules.

So there is no single blended gain across the two periods. The market value just before 1 July 2027 is the pivot that separates them. How each portion is then brought to account — including the exact method and timing — is detail the ATO’s transitional guidance and worked examples will carry; the enacted default sets the two-era structure, not every step of the arithmetic.

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

The two eras: what changes at 1 July 2027

The split exists so each period is taxed under the rules in force at the time. Broadly, as at July 2026, the two sides fall out like this:

Period	Broad treatment
Up to 30 June 2027	Old rules — pre-1 July 2027 regime
From 1 July 2027	New rules — indexation and Division 119

On the old side, the settings that applied to CGT events before 1 July 2027 continue for the pre-changeover portion. On the new side, the enacted reform ends the 50% discount for individuals, trusts and partnerships, brings back CPI indexation of the cost base, and adds a new Division 119 minimum 30% tax. The discount is retained for new residential dwellings and qualifying affordable housing, and complying super funds keep the 33.33% discount.

The sections below take each era in turn. Neither is a worked sum here — every dollar figure depends on the property, so these are the settings, not a calculator.

Era 1 — the gain up to 30 June 2027 (the old rules)

The first era runs from when you acquired the property to the changeover. Its gain is the market value just before 1 July 2027, less your original cost base — the cost base being what the property cost you in the broad sense (purchase price, buying and selling costs, capital improvements and certain ownership costs).

That gain keeps the treatment that applied before 1 July 2027. For an Australian resident individual, that is the 50% discount where the asset was held at least 12 months. As at July 2026, the ATO’s CGT discount settings by owner type, for CGT events before 1 July 2027, are:

Owner type	Discount (before 1 July 2027)
Individual (resident)	50%, if held at least 12 months
Trust	50%, same 12-month test
Company	None — taxed on the whole gain
Super fund	33.33% for complying funds

The 12-month test excludes both the day you acquired the property and the day of the CGT event, and capital losses are applied before the discount. This is the regime the reform ends for events from 1 July 2027 — it continues to matter here only because it governs the pre-changeover portion of a property held across the date.

Era 2 — the gain from 1 July 2027 (the new rules)

The second era starts at the deemed reacquisition. Its cost base begins at the market value just before 1 July 2027, and the gain is worked out against that fresh starting point when you eventually sell. Two new settings apply to that gain.

CPI indexation of the cost base. In place of the 50% discount, the new rules lift most cost base costs for inflation using the Consumer Price Index, so a larger cost base leaves a smaller taxable gain. Indexation excludes the third element — the costs of owning the asset, such as interest, rates and insurance — and is available only where the asset was held at least 12 months. The exact indexation factor is set by a formula in the Act; this guide states the method, not the numbers, because the figures depend on the periods involved.

The Division 119 minimum 30% tax. Division 119 is a floor, not a flat rate and not a discount. It tops up the tax on residential and non-residential capital gains so that, before offsets, the rate on the covered gain is at least 30%; where your marginal rate already taxes the gain at 30% or more, there is nothing extra to pay. New residential dwellings and qualifying affordable housing are excluded from the floor. What exactly counts as a “new residential dwelling” turns on requirements the Minister is to set by legislative instrument, and that instrument was not yet made as at July 2026 — so the boundary of that carve-out is not yet on the public record, and this guide does not draw it.

Because indexation reduces the era-2 gain before the floor is tested, the two settings work in sequence rather than in competition. How they land for a particular holding depends on figures no general article can supply.

Market value or apportionment: the default and the alternative

The deemed market value just before 1 July 2027 is the default route through the split, and it is set in the enacted law. The Act also names an apportioning method under section 112-185 as an alternative to it — a mechanism that divides the gain by reference to time held on each side of 1 July 2027, rather than by reference to a valuation at the changeover.

That alternative is not settled. Section 112-185 lets the Minister set the apportioning method by legislative instrument, and as at July 2026 none had been made — so exactly how the apportioning method works, 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.

Neither route is presented here as the “right” one. Which suits a particular property depends on the property, the timing and figures a general guide cannot supply — and, as above, the apportioning method’s rules were not yet finalised as at July 2026, even though the market-value default is set in the Act. A registered tax agent and the ATO’s transitional guidance are the places to confirm how the choice works for a specific holding.

What the split means for your records

The two-era split does not change the ordinary CGT record-keeping rules — if anything, it raises the stakes on them, because the pre-changeover cost base and the changeover value both have to be substantiated later. 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.

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

How does this apply to fractional interests like Brix?

The split above describes how the transition treats a CGT asset such as a directly held 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 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 deemed 30 June 2027 market value 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 two-era split 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 two-era split is enacted law; the working detail — including the section 112-185 apportionment method, the indexation factor and the “new residential dwelling” boundary — 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.