The government will impose a 30% minimum capital gains tax from July 1, 2027, while Age Pension recipients will be exempt. The change replaces the 50% CGT discount with an inflation-indexed discount and applies the 30% minimum to real gains accruing from that date, under two bills introduced to Parliament. Millions of Australians receive the Age Pension, including a substantial number of part-pensioners, a cohort the design leaves outside the minimum and that could alter retirement planning. The government says the move aims to reduce timing incentives around asset sales and to align tax on gains with typical wage rates, and it is consulting on further carve-outs before final legislation is settled.

The policy pairs a tougher baseline on capital gains with a deliberate carve-out for pensioners, a contrast that will shape behaviour across retirement portfolios. Treasurer Jim Chalmers told Parliament the minimum tax seeks to curb incentives to time asset sales into low marginal tax years and to bring tax on realised gains closer to what people pay on wages. To do that, the government has put forward the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026.

The legislative package ends the flat 50% CGT discount and substitutes an inflation-adjusted discount, then adds a 30% minimum tax on real capital gains. Both measures apply to gains accruing from July 1, 2027, not to past sales. Under the new mechanics taxpayers will apply the inflation-indexed discount to a gain; if the remainder is below the 30% minimum threshold, then the minimum will top up the tax payable on that real gain.

The reforms also touch negative gearing. The government will ban negative gearing on existing properties except for new builds, while grandfathering existing investors who currently use negative gearing. This Treasurer framed these moves as part of a broader tax reset, linked to new offsets and worker measures introduced alongside the CGT changes.

The government has built explicit carve-outs into the design, with Age Pension and certain income support recipients excluded from the 30% minimum. Instead, those recipients will continue to pay capital gains tax at their marginal rate after the new inflation-adjusted discount is applied, according to government statements. The exemption explicitly covers Age Pension recipients and has been extended to JobSeeker and some other income support payments.

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Department of Social Services figures show about 2.67 million Australians receive the Age Pension, of whom roughly 860,000 are part-pensioners. That's a large group who will sit outside the new minimum tax.

The practical filter for entitlement remains the department's mechanics: fortnightly income cut-offs and asset-test limits determine who qualifies, with separate cut-offs for singles and couples and higher thresholds for non-homeowners.

The contrast between a tougher CGT floor and the pension carve-out creates an incentive for some retirees to seek or preserve pension eligibility, observers and critics say. Tax advisers and some retirement specialists have warned retirees may restructure affairs to qualify for pension payments and thereby avoid the minimum tax. That prospect is already shaping advice conversations.

Perks Private Wealth adviser Emma Burckhardt has told industry outlets advisers won't pursue a pension at the expense of long-term wealth, but they will more closely examine clients who sit near eligibility thresholds. That means advisers are likely to review timing of asset sales, asset location and the interactions between assessable income and assets under the department's tests, even if they stop short of recommending moves that erode a client's balance sheet.

Political pushback and targeted carve-outs are influencing the consultation process. State premiers have expressed concern about broad CGT changes, and the federal government has signalled it will consult on additional carve-outs for small and start-up businesses before settling final details. The government says where appropriate it will legislate further exemptions following stakeholder consultation.

For taxpayers and their advisers the headline date is clear: the 30% minimum will apply to gains accruing from July 1, 2027. The bills are already in Parliament and the government is proceeding to stakeholder consultation on remaining details and targeted carve-outs before final legislation is passed.

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The next fixed milestone is July 1, 2027, when the indexed discount and the 30% minimum apply to gains accruing thereafter, with further carve-outs to be settled during stakeholder consultation.

This article was created with AI assistance.