The 2027–28 tax reforms and the value of your business

What the new law says

The reform passed both houses of Parliament on 25 June 2026, with 33 Senate amendments along the way, and received royal assent the next day as the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Act 2026.

• From 1 July 2027, the 50% CGT discount for individuals, trusts and partnerships is replaced by CPI cost-base indexation plus a 30% minimum tax on capital gains accruing from that date.
• Assets held on 1 July 2027 are deemed sold and reacquired on that date. The gain accrued up to then keeps the old 50% discount, deferred until you actually sell; growth after it falls under the new rules.
• The split between old and new gain is measured primarily by market valuation at 1 July 2027. A formula-based apportioning method exists as an election, but the valuation route only works if you can evidence the asset’s value at that date. For a business that did most of its growing before 2027, it is usually the better answer.
• Pre-CGT assets lose their exempt status for growth after 30 June 2027. Their market value at 1 July 2027 becomes the deemed cost base for everything that follows.
• Negative-gearing deductions are limited to new residential dwellings and properties acquired before the 12 May 2026 Budget announcement.
• From 1 July 2028, a 30% minimum tax applies to discretionary trust distributions, with a further technical bill on trusts still to come.
• A three-year restructure rollover window is intended to run from 1 July 2027 to 1 July 2030, proposed to extend beyond small business entities to passive assets and discretionary trusts. It is announced, not yet legislated.
• One Senate amendment matters particularly for regional operating businesses: the aggregated-turnover threshold for the small business 50% active-asset reduction rises from $2 million to $10 million from 2027–28.

Why this lands on valuation

The deemed-sale mechanism makes 1 July 2027 a valuation date for every CGT asset in the country. An owner who wants the market-valuation split needs to be able to evidence what the business was worth on that day. A valuation prepared at or near the date is straightforward to defend. One reconstructed years later, for a transaction the ATO is already looking at, is not. And every owner in that position will need evidence for the same date.

What to do now

1. Get a current-state valuation on file, prepared under APES 225 and scoped to the decision you are facing. For many owners a Valuation Review is the right first step, updated at 1 July 2027.
2. Talk timing with your accountant. The deemed-sale split, the trust changes from 2028 and the proposed 2027–2030 rollover window make when as important as whether.
3. Revisit before you transact. A valuation ages. The reform makes its vintage part of the evidence.

We will publish detailed briefings as the remaining pieces land (the trust bill and the rollover legislation are still to come), and this page is where they will live. In the meantime, the fastest way to work out what the changes mean for your business is a conversation.

This page summarises enacted legislation and announced measures for general information. It is not tax advice: decisions about your own position should be made with your accountant or adviser.