What are the proposed changes to Australia's Capital Gains Tax (CGT) system?

The federal government is scrapping the 50% CGT discount and replacing it with inflation indexation to tax real, inflation-adjusted gains. Additionally, a new minimum tax rate of 30% will be introduced on these real gains for local individual investors.

Why is the Australian Government changing the CGT discount to inflation indexation?

Treasury analysis argues the current 50% discount system distorts the economy by over-compensating high-growth investments and under-compensating low-growth assets.

How will the CGT changes impact individual retail investors trading Australian shares?

Individual investors on the top 47% marginal income tax rate will face varying effective tax rates depending on their performance.

Which assets are included under the new Australian CGT rules?

The changes apply broadly to almost all asset classes beyond residential real estate, including listed shares, commercial property, crypto, stakes in private companies, and start-ups.

Will superannuation funds and foreign investors be affected by the CGT changes?

No, the tax settings for superannuation funds and foreign investors remain completely unchanged under this policy. Superannuation funds will maintain their 10% CGT rate, and foreign investors remain exempt from Australian CGT except on local real property assets.

What concessions are available for small businesses under the new CGT framework?

Small businesses with an annual turnover under $2 million or net assets under $6 million will retain significant concessions and exemptions.

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Chalmers deploys Treasury analysis to quell CGT outcry

Written by Mahathir BayenaPublished May. 18 2026Last Updated May. 18 2026

Treasurer Jim Chalmers will deploy fresh Treasury analysis at a Bloomberg event to quell an investor outcry over federal budget changes to capital gains tax, arguing the reforms will not damage broader economic investment.

The six-page Treasury briefing reveals the average tax rate on gross capital gains is projected to rise only modestly—from 19.3% to 21.4% over the next decade.

Defending the decision to scrap the 50% CGT discount for indexation and implement a 30% minimum rate on real gains, Treasury asserts the current system overcompensates high-growth assets while distorting investment.

Under the new model, an investor in the top 47% marginal rate achieving a 5.1% annual return on the ASX 200 would face an effective CGT rate of 21.4%.

The changes apply broadly across listed shares, commercial property, and start-ups to prevent investors from using corporate structures to bypass the rules.

The Treasury minimised the broader economic fallout, noting that individuals hold less than 15% of ASX-listed shares, while the tax settings for superannuation funds and foreign investors remain untouched.

Furthermore, small businesses with turnover under $2 million will retain significant concessions.

Addressing international comparisons, Treasury stated Australia’s real-gains model remains competitive with nations like Norway and Denmark, rejecting claims that local rates will become the world's highest.