What is the proposed 30% CGT minimum tax floor?

A floor that ensures the post-1-July-2027 portion of a capital gain on Australian residential property is taxed at a minimum 30 percent effective rate, regardless of the taxpayer's marginal tax rate. The floor never reduces tax for someone already paying more than 30 percent.

Who does the floor affect most?

Low-marginal-rate sellers - retirees, low-income investors, beneficiaries of streamed trust distributions. The floor only raises the bill where the taxpayer's effective rate on the post-2027 gain would otherwise be below 30 percent.

Does the floor apply to pre-2027 gains?

No. The floor only applies to the post-1-July-2027 portion of the gain. The pre-2027 portion is taxed under current law (50 percent individual discount).

How does the floor interact with the 50% CGT discount?

The 50 percent discount continues to apply to the pre-2027 portion of the gain. The post-2027 portion uses an indexed cost base (no discount on the indexed real gain); if the effective tax on that portion is below 30 percent, the floor raises it to 30 percent.

What is the 30% CGT minimum tax floor? Worked examples for property investors

The proposed 30% minimum tax floor on capital gains is the new mechanic that most surprises property investors when they read the 2025 Budget paper. It sits inside the broader CGT split at 1 July 2027 and only applies to the post-2027 portion of a gain on residential property. Here's exactly when it bites and when it doesn't, with three worked taxpayer scenarios.

The mechanic

For a residential property sold on or after 1 July 2027 the capital gain is split at the valuation as at that date:

Pre-2027 portion: taxed under current law - the 50% CGT discount for individuals on long-term gains, 33.3% for SMSF accumulation, 0% for SMSF pension, no discount for companies.
Post-2027 portion: the gain is CPI-indexed (real gain only), then taxed at marginal rate. If marginal-rate tax on the post-reform portion would be less than 30% of that portion, the 30% floor applies instead.

The key thing: the floor applies to the post-2027 portion only, not the whole gain. And it's a floor, not a flat rate - high-rate taxpayers paying more than 30% in marginal-rate terms are unaffected.

Three worked examples

Same gain ($400,000 post-2027 portion, no pre-2027 portion for simplicity), three different taxpayers.

Scenario A - high-income individual ($250,000 salary)

The $400k gain pushes most of the addition into the top 45% bracket. Marginal-rate tax on the $400k is approximately $173,000 (45% of $385k that sits above the $190k threshold, plus 37% on the $5k below).

$173k / $400k = 43.3% effective rate. The marginal-rate calculation is above the 30% floor, so the floor doesn't bite. The taxpayer pays $173,000.

Floor result

High-income taxpayer is taxed at marginal rate. The 30% floor is irrelevant because they're already paying more.

Scenario B - average-income individual ($95,000 salary)

The $400k gain pushes income across two brackets - 30% for the first $40k of the gain (which takes income from $95k to $135k), 37% for the next $55k (up to $190k), 45% for the remaining $305k. Marginal-rate tax on the gain works out to approximately $165,000.

$165k / $400k = 41% effective rate. Still above the floor. The floor doesn't bite here either.

Scenario C - retiree on $30,000 of other income

The $400k gain pushes a retiree from low taxable income across three brackets. Approximate marginal-rate tax: $93,000.

$93k / $400k = 23% effective rate. Below the 30% floor. The floor applies: tax becomes $400k × 30% = $120,000.

Floor result

Low-income taxpayer pays $27,000 MORE than they would under marginal-rate alone. The floor effectively closes the path previously used by retirees to realise gains in low-income years.

Where the floor actually bites

The floor hits taxpayers who would otherwise pay less than 30% marginal-rate tax on the gain. In practice that's:

Retirees drawing modest income who realise gains in low-income years.
People between jobs who time a property sale for a gap year.
Discretionary trusts streaming gains to low-income beneficiaries (students, parental leave, etc.). The 2028 trust minimum tax does similar work via a different mechanic.
SMSFs in accumulation phase with a 10% effective gain rate - the floor takes them up.

For ordinary working-age PAYG investors on $100k+ salaries selling a property with a meaningful gain, the floor is essentially never the binding constraint. Marginal-rate tax on a $300k+ gain pushed into the top brackets is already well above 30%.

What the floor combined with the loss of the discount means

It's worth restating because they're separate mechanics:

Loss of the 50% discount on the post-2027 portion. This is the big number for high-rate investors - it doubles the effective rate on the affected portion of the gain.
CPI indexation on the cost base for the post-2027 portion. This partially offsets the loss of the discount by taxing only real gains.
30% floor on top of marginal-rate. This catches low-rate taxpayers who would otherwise pay less.

For high-income individual investors, #1 dominates. For retirees and low-rate beneficiaries, #3 dominates. For everyone, #2 partly mitigates #1.

Calculate it for your gain

Our CGT impact calculator runs the simplified pre vs post comparison with the floor applied. The full Byrz engine handles the CGT split mechanic (apportioning gain across the 1 July 2027 boundary), the indexation, and structure-specific treatment. See the sample report.

Caveats

The 30% minimum tax floor is proposed as of late 2026 - not law. The rate, the threshold, and the application to specific structures may change in the final legislation.