Australia’s proposed Capital Gains Tax (CGT) changes from 1 July 2027 could make the timing of your investment property’s capital growth more important than ever.

In this video, Latitude Accountants CEO John Saade explores a key question for property investors: should you get your investment property professionally valued around 30 June 2027?

The answer is not necessarily the same for every investor.

John built a calculator to compare two approaches and ran several scenarios to demonstrate how the timing of capital growth could influence the eventual tax outcome. The examples show why an investor whose property has experienced significant growth before 1 July 2027 may have different considerations from someone who purchased recently or expects most of their property’s growth to occur after 2027.

With the proposed CGT changes, understanding your property’s growth history and keeping appropriate records could become an important part of your tax planning.

What Are the Proposed 2027 CGT Changes?

Under the Australian Government’s announced reforms, from 1 July 2027, the existing 50% CGT discount is proposed to be replaced by an inflation-based indexation approach, with a minimum 30% tax rate applying to capital gains. The Government says the new arrangements are intended to tax real capital gains after inflation.

The changes are intended to apply prospectively. Treasury states that gains accrued on existing investments before 1 July 2027 will retain the 50% discount, regardless of when the asset is ultimately sold.

This creates an important question for property investors:

How do you determine how much of your eventual capital gain relates to the period before and after 1 July 2027?

This is where valuation and the timing of capital growth become relevant.

Why Does 30 June 2027 Matter for Investment Properties?

Property values do not generally increase at a perfectly consistent rate.

A property might:

• Increase significantly in value shortly after purchase
• Remain relatively flat for several years
• Experience a sudden jump because of market conditions
• Increase substantially following renovations
• Grow rapidly because of changes in the surrounding area
• Experience stronger growth after 1 July 2027

The timing of those changes can matter when determining how capital gains are treated under the proposed new rules.

John’s calculator demonstrates this concept by comparing a formal property valuation with an alternative apportionment approach discussed in relation to the proposed CGT changes.

The key takeaway is simple:

It is not only how much your property grows that matters. It is when that growth happens.

Property Valuation vs the Proposed CGT Apportionment Formula

One of the important considerations discussed by John is whether an investor should obtain a formal market valuation around 30 June 2027 or rely on the proposed formula for determining the allocation of gains.

The formula is designed to apportion the capital gain across the relevant ownership periods. However, as the examples in the video demonstrate, property growth may not follow the smooth pattern assumed by a formula.

A formal valuation can provide evidence of the property’s market value at a particular point in time.

This could become particularly relevant where:

• Your property has experienced unusually strong growth before 1 July 2027
• You have renovated the property and increased its value
• Comparable properties in your area have increased substantially
• You believe your property’s growth has significantly outpaced inflation
• A large portion of the property’s expected growth has already occurred

The decision should not be based simply on the cost of obtaining a valuation. The potential tax difference also needs to be considered.

When Could a Property Valuation Be Worthwhile?

John’s calculator demonstrates several different scenarios.

Scenario 1: Steady Property Growth

Imagine purchasing an investment property for around $1 million and eventually selling it for approximately $2 million.

If the property experiences relatively steady growth throughout the ownership period, the difference between the valuation approach and the formula may be relatively small.

In this type of situation, the cost of a professional valuation needs to be considered against the potential tax benefit.

The valuation may still produce a benefit, but it may not be substantial.

Scenario 2: Strong Growth Before 2027

Now consider an investor whose property has increased dramatically in value before 30 June 2027, but is expected to experience slower growth afterwards.

This is where a valuation could potentially become much more valuable.

For example, if a property purchased for $1 million has increased to almost $2 million by 2027 but is expected to grow much more slowly afterwards, establishing its market value around the relevant date could potentially help preserve the distinction between earlier and later growth.

In John’s example, the difference between the two approaches was substantial.

Scenario 3: Most Growth Happens After 2027

The situation can be different for someone who purchased a property recently and has seen limited growth so far.

If most of the property’s expected capital growth occurs after 1 July 2027, paying for a valuation may provide less benefit.

This is why there is no universal answer to whether every investment property should be valued.

What About Renovations and Significant Property Improvements?

Renovations can also complicate the growth picture.

If you purchase a property and subsequently undertake significant improvements, the property’s market value may increase considerably.

Other factors can also cause rapid growth, including:

• Infrastructure developments
• New schools or transport links
• Changes to the local property market
• Strong demand in the suburb
• Major improvements to the property
• Broader market movements

If your property’s value has increased substantially before 30 June 2027, obtaining professional advice about valuation may be worth considering.

Do You Have to Get the Valuation on 30 June 2027?

The date itself is important, but investors should not assume that missing 30 June automatically means they have lost the opportunity to obtain evidence of the property’s value.

John’s video discusses the possibility of obtaining a retrospective valuation from a suitably qualified independent valuer.

However, valuation requirements and the final operation of the legislation should be confirmed with a qualified tax professional and valuer based on the rules that apply at the relevant time.

This is particularly important because the implementation details of the proposed CGT reforms may continue to develop before 1 July 2027.

Does This Apply to Your Family Home, Shares and Crypto?

Not every asset should be treated the same way.

Your family home can generally qualify for the main residence exemption, subject to the applicable rules and your individual circumstances. The proposed CGT changes are therefore not a reason to automatically obtain a valuation of your principal residence.

Shares and certain other market-traded investments are also different because market prices may already provide readily available evidence of value.

The treatment of different assets can vary considerably, so investors should consider each asset separately rather than applying the same valuation strategy across their entire portfolio.

The Key Question: When Did Your Property Grow?

The most important lesson from John’s calculator is that the property’s overall growth figure does not tell the whole story.

Consider these questions:

• When did you purchase the property?
• What was its original cost base?
• What is its current estimated market value?
• How much has it increased before 1 July 2027?
• Have you completed renovations or improvements?
• What growth do you reasonably expect after 2027?
• What would a professional valuation cost?
• Could the potential tax difference justify that cost?

A property that has experienced substantial growth before 1 July 2027 may warrant a different approach from a recently purchased property that is expected to achieve most of its growth later.

The right decision therefore depends on your individual circumstances, the property’s growth pattern and the final rules governing the 2027 CGT changes.

Frequently Asked Questions About Investment Property Valuations and the 2027 CGT Changes

Should I get my investment property valued before 30 June 2027?

Not necessarily. The potential benefit depends on factors including your property’s current value, purchase price, expected future growth and when the capital growth occurred. A tax professional can help assess whether a valuation is appropriate for your circumstances.

What happens to the 50% CGT discount after 1 July 2027?

The Australian Government has announced that the existing 50% CGT discount is to be replaced by an inflation-based indexation approach from 1 July 2027, alongside a minimum 30% tax rate on capital gains.

Can I get a retrospective property valuation?

A retrospective valuation may be possible in appropriate circumstances. The suitability and evidentiary requirements should be discussed with a qualified independent valuer and your tax adviser.

Is my family home affected by the proposed changes?

The Government has stated that the reforms will not change tax arrangements for the family home. However, specific circumstances can affect the application of the main residence exemption.

Should I rely on an online property estimate?

Online property estimates and comparable sales can help you understand a property’s approximate market value, but they are not necessarily a substitute for a formal valuation where independent valuation evidence is required.

Talk to Latitude Accountants About Your Investment Property

The proposed 2027 CGT changes could have different implications depending on your property, ownership structure, cost base and growth history.

If you are unsure whether a valuation could be worthwhile, speaking with an experienced accountant before making the decision can help you understand the potential tax implications.

Latitude Accountants can assist with investment property tax, CGT, accounting and broader tax planning.

📍 Sydney Olympic Park | Marrickville | Melbourne | Loxton | Adelaide
📞 1300 706 597
📧 info@latitudeaccountants.com.au

Disclaimer

This article provides general information only and does not constitute financial, legal, tax, property or business advice. The 2027 CGT changes discussed are based on announced government reforms and may be subject to legislation, further consultation and changes to implementation details. Your tax position will depend on your individual circumstances. Speak with a qualified tax professional before making decisions about your investment property, valuation or CGT position.