The proposed 2027 reform splits capital gains at 1 July 2027. Gains accrued before that date retain current law (the 50% CGT discount for individuals on long-term gains). Gains accrued after lose the discount: indexed real gain only, with a 30% minimum tax floor. That mechanic has triggered the “should I sell now?” question across thousands of Australian property investors.
The sample property
$1.85M established Sydney residential property, $1.628M IO loan at 6.8%, $78,000 gross rent, joint personal ownership, settled September 2026. We compare two exit strategies for the same property.
Two exits, same property
| Outcome | Sell 30 Jun 2027 | Hold to Jul 2032 |
|---|---|---|
| Hold period | ~9 months | ~6 years |
| Sale price | ~$1.92M | $2,453,972 |
| Cost base + selling costs | ~$2.0M | ~$1.92M |
| CGT paid | ~$0 | $90,065 |
| Cashflow drag during hold | ~$25–35k | $446,954 |
| Quarantined losses unused at sale | $0 | ~$400,000 |
| Net cash to owner | ~$224k | $810,157 |
The dollars favour holding
The longer hold delivers ~$586k more net cash at sale. The CGT cost ($90k) is a fraction of the capital growth captured (~$604k). Loss of the salary offset under the negative-gearing restriction bites the cashflow but doesn't change the property's underlying growth.
The risks favour selling earlier
The hold scenario carries three things the sell scenario avoids:
- Cashflow risk. $446,954 over six years is ~$74k a year of out-of-pocket carry - after-tax money, because the salary offset that used to cushion it is restricted from 2027-28. An investor who funds that from savings or income needs to be confident through the hold.
- Interest-rate risk.The numbers assume 6.8% held constant. A 1% shock on a $1.628M loan adds ~$16k/year of interest. Across six years that's ~$98k of additional drag. Byrz's stress-test section models this explicitly.
- Opportunity cost.Selling early frees ~$380k (less transaction costs) to redeploy. If that redeployment outperforms the property's growth plus the lost cashflow drag, the early sale wins on a portfolio basis.
What the comparison doesn't capture
Two further considerations that don't fit cleanly in a table:
- Carrying capacity of the household.$33k/year of after-tax carry assumes the household can fund it. For some investors that's noise; for others it's the deal breaker. The cashflow chart in Byrz's report shows year by year so the worst single year (often year 5) is visible.
- Re-entry friction.Selling now and rebuying in the same market in 2029 means paying stamp duty twice plus the new acquisition costs. For Sydney that's typically $80k+ of dead transaction cost on each leg.
The right framing
“Should I sell before 1 July 2027?” is the wrong framing. The CGT split is a mechanical event that changes what you keep, not when you should sell. The right question is:
Given this property's expected growth, cashflow drag and tax treatment under both regimes, does holding it produce a better risk-adjusted return than selling and redeploying the equity elsewhere?
That answer depends on your specific property, your hold capacity, and what you'd do with the redeployed equity. Byrz's hold vs sell timing section models the property at multiple horizons (4 / 6 / 8 / 11 years) and shows after-tax IRR for each, so the trade-off surfaces in one row.
See the full worked example in our sell-before-2027 explainer, or run it on your own property with a $49 Byrz report.