Australian Capital Gains Tax Changes: Protect, Preserve and Prosper in Uncertain Times

Future Accounting
58 minutes ago
3 min read

Introduction

Australian capital gains tax changes are back in the spotlight. From potential reductions to the 50% CGT discount to discussions around the main residence exemption and small business concessions, policy reform is being actively debated.

While no legislation has changed yet, the conversation is gaining momentum.

For investors, property owners and business operators, this is not a time for panic — it is a time for planning.

At Future Accounting Group, we guide clients using our Future Prosperity Model: Protect, Preserve, Prosper.

Let’s explore what Australian capital gains tax changes could mean through that lens.

Protect: Understand your exposure before Australian Capital Gains Tax Changes happen

Under current rules, individuals and trusts that hold an asset for more than 12 months are generally entitled to a 50% CGT discount. This means only half of the capital gain is included in taxable income.

Example:

Capital gain: $500,000
50% discount applied
$250,000 added to taxable income

One of the most widely discussed Australian capital gains tax changes is reducing this discount — for example from 50% to 25% — or removing it entirely.

Scenario:

Salary income: $150,000
Investment property gain: $400,000
Share portfolio gain: $100,000
Total capital gain: $500,000

Under current rules, $250,000 is taxable.

If reduced to 25%, $375,000 becomes taxable.

If removed entirely, $500,000 becomes taxable.

For higher income earners, this could mean $50,000 to $100,000 or more in additional tax.

Protection means modelling these outcomes now — before any Australian capital gains tax changes are introduced.

Preserve: Structure your assets strategically amid Australian Capital Gains Tax Changes

Beyond the 50% discount, discussions around Australian capital gains tax changes include replacing the discount with indexation, adjusting treatment of investment properties, introducing caps to the main residence exemption, and reviewing small business CGT concessions.

Main residence exemption:

Currently, most Australians can sell their family home free from CGT (subject to eligibility conditions). Some commentary suggests introducing a tiered cap, such as the first $300,000 of gain exempt and the balance taxed at marginal rates.

Small business CGT concessions include:

15-year exemption
50% active asset reduction
Retirement exemption
Small business rollover

For eligible business owners, these concessions can significantly reduce or eliminate tax on exit.

Preserving wealth means ensuring eligibility requirements are met, documentation is strong, and ownership structures align with succession planning.

Prosper: Make confident decisions, not reactive ones, as Australian Capital Gains Tax Changes evolve

Australian capital gains tax changes may be framed around fairness, housing affordability or budget repair. Many Australians rely on investment properties, share portfolios and businesses built over decades of risk-taking.

Prosperity comes from:

Scenario modelling
Strategic timing
Tax-effective structuring
Exit planning well in advance

The clients who prosper are those who act early.

What you should do now

Now is the time to:

Review unrealised capital gains
Model outcomes under reduced discount scenarios
Revisit trust and ownership structures
Confirm small business concession eligibility
Align exit and retirement planning with tax strategy

Australian capital gains tax changes may or may not occur — but uncertainty creates opportunity for those who prepare.

At Future Accounting Group, we help you Protect what you have built, Preserve your wealth through smart structuring, and Prosper through confident decision-making.

Book an appointment with our team today to review your position and ensure your future prosperity.

Disclaimer  

This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.  

Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder 

Liability limited by a scheme approved under professional standards legislation.