The two regimes, side by side

For each disposal date we run both regimes and compare the after-tax proceeds. The difference between them is the damage. Sale price S is your purchase price grown at your growth assumption for t years; c is selling costs; π is the annual CPI rate; τ(·) is the progressive income tax on the gain when stacked on your other income.

Pre-Budget — 50% CGT discount
B =  purchase + buying costs
G =  max{ 0, S − B − c }
T  =  τ(0.5 · G)
P  =  S − c − T
Post-Budget — indexation + 30% floor
B′  =  B · (1 + π)t
G =  max{ 0, S − B′ − c }
T =  max{ τ(G),  0.30 · G }
P  =  S − c − T

Real-dollar (today's $) figures deflate the nominal proceeds by (1 + π)t.

Marginal tax brackets

Brackets are selected by the modelled disposal financial year — a sale in FY 2027–28 uses the 2027–28 rates (with the 14% second bracket already legislated), a sale in FY 2025–26 uses the current 16% second bracket, and so on. They're applied incrementally: a $100k gain that pushes you from the 30% to the 37% band is split, not taxed at 37% on the whole thing. The tax on the gain is tax(other income + gain) − tax(other income).

  • $0 – $18,200 → 0%
  • $18,201 – $45,000 → 16% (25–26) / 15% (26–27) / 14% (27–28)
  • $45,001 – $135,000 → 30%
  • $135,001 – $190,000 → 37%
  • $190,001+ → 45%

On top of the income tax, we add:

  • Medicare levy — flat 2% on assessable income above $26,000.
  • Medicare Levy Surcharge — flat 1.25% on income above $93,000 (single). The calculator assumes you do not hold private hospital cover, so the surcharge is always on once you cross the threshold.

The 50% discount (pre-Budget)

Under current rules the realised gain is halved before being added to assessable income. Tax then runs through the bracket stack described above. The calculator applies the 50% discount whenever the pre-Budget regime is in play; it does not separately check the 12-month holding requirement, so very short hold periods will overstate the discount benefit — confirm with your accountant if you intend to sell within a year.

The indexation method (post-Budget)

Under the post-Budget regime the discount is replaced by indexing the cost base for inflation. The calculator uses a single annual compound rate over the entire hold period:

B′  =  B · (1  + π)t

The net real gain (S − B′  − c, floored at zero) is then taxed at the higher of the progressive marginal stack and a flat 30% of the net gain — a minimum effective rate intended to keep the regime from leaking too far on the upside.

This is a deliberate simplification of the historical ATO method, which indexes each element of the cost base from the quarter it was incurred using quarterly ABS CPI factors. We treat the whole cost base as a single sum and apply your chosen CPI assumption across the hold period.

See /sourcesfor ABS data references. The CPI figure in the calculator is your own assumption; we don't pin it to a published forecast.

Cost base

The calculator takes a single cost-base figure:

  • Shares / ETFs: purchase price plus brokerage on the way in. (Brokerage on sale is captured separately as a selling cost.)
  • Investment property:purchase price plus a single "stamp duty + legal" figure. Capital improvements, Division 43 capital-works recapture, and per-element indexation are not modelled — bundle them into your accountant's working if they apply.

Entity type

The calculator models an Australian resident individual only. Trusts (with their flow-through and trustee-election choices) and SMSFs (15% accumulation rate, 0% pension-phase) are not exposed in the UI. If you hold the asset through a trust or super fund, the numbers below will not apply — talk to your accountant.

Reform start and transitional rules

The new CGT regime applies to gains arising on or after 1 July 2027. Sales before that date continue under the existing 50% discount, regardless of when the asset was acquired. The calculator works out the modelled disposal date as acquisition + hold years and selects the regime accordingly. Disposals spanning the cutoff are notpro-rated — the entire gain is treated under one regime, matching the natural reading of the budget paper's “gains arising on or after 1 July 2027” language. If Treasury publishes draft legislation that requires pro-rata accrual we'll revisit.

The 7:30pm AEST, 12 May 2026 cutoff you may have read about belongs to a different reform: it limits negative gearing on established residential property acquired after that time, with existing landlords grandfathered. It has no effect on CGT regime selection.

Two carve-outs in the budget paper are not modelled here, but are worth knowing:

  • New residential builds — investors can elect to keep the 50% discount on eligible new construction, or use indexation + 30% floor. The calculator always applies the default post-reform rules; if you are buying a new build, run both scenarios and pick the lower tax outcome.
  • Age Pension and other income-support recipients are exempt from the 30% minimum tax. The calculator does not detect this — if your stated other income is mostly pension, the post-reform tax shown may be overstated.
  • Pre-1985 assets remain exempt from CGT for gains arising before 1 July 2027; gains arising from that date are taxed under the new rules. The calculator treats them like any other CGT asset post-reform.

What we deliberately simplify

These are conscious omissions. Each one is something to ask your accountant about if it applies to you:

  • Single annual CPI rate — not the ATO's quarterly per-element indexation
  • Bracket selection follows the disposal year, but other income is held constant in nominal dollars (no projected wage growth)
  • Resident individual only — no SMSF, trust, or non-resident treatment
  • Always assumes you do not hold private hospital cover, so the Medicare Levy Surcharge applies above $93k single
  • No 12-month holding-period check on the 50% discount
  • Franking credits on shares; parcel matching for partial share sales
  • Carried-forward capital losses
  • Small-business CGT concessions (Division 152)
  • Main-residence apportionment for partially-owner-occupied property
  • Capital improvements as separate cost-base elements; Division 43 capital-works deductions
  • Multi-party ownership — the tool assumes 100% ownership
  • Income projection across the hold period — your stated other income is held constant in nominal dollars

Not advice

Everything here is educational. The calculations use a narrow model on purpose. Confirm anything with a registered tax agent before acting, especially if the after-tax difference between the two regimes is large or your situation touches any of the simplifications above.