CGT Changes 2026: 5 Things Investors Must Know

By The Chipkie Team, Personal Finance Editorial Team  ·  Last updated 18 October 2026

Every year brings a fresh round of speculation about capital gains tax, and the CGT changes 2026 has delivered are no exception. If you own an investment property, a parcel of shares, or a slice of a family home held with a sibling, it pays to separate what has genuinely shifted from what has simply been talked about. The practical reality is less about dramatic new rates and more about tighter administration, sharper data matching, and the very ordinary family transactions that quietly trigger a taxable event.

That last point catches more Australians than anything else. Helping a child onto the property ladder, restructuring a co-owned investment, or “just putting the title in their name” are not neutral acts. The Australian Taxation Office treats them as disposals, and it values them at market rates whether money changes hands or not.

Key Takeaways

• Australia has no gift tax and no inheritance tax, but capital gains tax still applies when you transfer an asset to a family member, even for no payment.
• According to the ATO, individuals who hold a CGT asset for more than 12 months can generally apply the 50% CGT discount to the gain.
• The market value substitution rule means a transfer to a child at $1, or at a “mates rates” price, is taxed as if it sold at full market value.
• On co-owned property, each owner declares their share of the capital gain according to their legal interest on title, not according to who paid what.
• A properly documented family loan is not a CGT event, while gifting an asset usually is — the structure you choose has real tax consequences.

What has actually changed about CGT in 2026, and what hasn’t?

The architecture of capital gains tax is unchanged in 2026: the 50% discount for individuals holding assets longer than 12 months, the main residence exemption, and the cost base rules all remain. What has tightened is enforcement, foreign resident withholding at settlement, and the ATO’s visibility over property and share transactions.

Where investors should focus:

• Data matching. The ATO receives information from state land titles offices, property managers, share registries, and cryptocurrency exchanges. Unreported disposals are increasingly found automatically rather than through audit.
• Foreign resident capital gains withholding. The rules around clearance certificates have been tightened in recent years, including changes to the property value threshold and the withholding rate. Check the current settings on the ATO website well before settlement, because an unobtained clearance certificate means money is withheld at settlement and recovered only through your tax return.
• Record keeping. Cost base records — purchase costs, stamp duty, legal fees, capital improvements — must be kept for years after disposal. Most of the CGT disputes we see start with missing receipts, not with aggressive tax positions.

For a broader view of what shifted at the start of this financial year, our 2026 Australian tax guide covers the settings that matter alongside CGT.

Why does transferring assets to children trigger CGT when no money changes hands?

Because the ATO applies the market value substitution rule. When you dispose of an asset to a related party for nothing, or for less than it is worth, your capital proceeds are deemed to be the asset’s market value on the day of transfer. You pay CGT on a gain you never received in cash.

This is the single most expensive misunderstanding in the capital gains tax family transfer space. A worked example makes it obvious:

• Parents bought an investment unit years ago. Their cost base, including stamp duty and legal fees, is $350,000.
• They transfer it to their daughter for $1 as a “gift”.
• An independent valuation puts the unit at $800,000 on the transfer date.
• The deemed capital gain is $450,000, reduced by the 50% discount if they have held it beyond 12 months, then split between them and added to their taxable income.

On top of that, most states and territories assess transfer (stamp) duty on market value rather than the stated price, so the daughter faces a duty bill too. There is no federal gift tax in Australia and no inheritance tax — but CGT and duty do the work that a gift tax does elsewhere.

Pensioner parents have a third issue. Under Services Australia’s gifting rules, you can give away $10,000 per financial year, capped at $30,000 across five financial years, before the excess is treated as a deprived asset and counted against the Age Pension assets and income tests for five years. That is a social security rule, not a tax rule, but it changes the maths on transferring assets to children.

How is CGT calculated on co-owned property?

Each owner reports their share of the capital gain in proportion to their legal interest on title. A 70/30 tenancy in common means a 70/30 split of the gain, regardless of who serviced the mortgage. Changing those percentages later is itself a part disposal, creating a CGT event for the owner giving up an interest.

Practical points on co-owned property CGT that are routinely missed:

• Tenancy in common versus joint tenancy. For non-married co-owners, tenancy in common is almost always the right choice: unequal shares, independent inheritance rights, and no automatic survivorship.
• Parents going on title to help a child borrow. If you are not living in the property, your share generally does not qualify for the main residence exemption, so your portion of any gain is taxable when the property sells.
• Negative gearing follows title. Rental income and deductions flow to each owner by ownership share, not by who paid the expenses.
• Future borrowing capacity. Lenders stress-test a co-borrower against the full outstanding debt, which can block that person from buying their own home years later. We cover this in detail in our guide to the Bank of Mum and Dad in 2026.
• First home buyer duty concessions are per person. If one co-buyer already owns property, the concession can be lost for the purchase.

Is a documented family loan a better option than gifting the asset?

Often, yes. Lending money is not a CGT event, because no asset is disposed of. The borrower receives cash, the lender holds a repayable debt, and no deemed capital gain arises. Only interest received is assessable income for the lender — principal repayments are not taxed.

If the money is heading towards a home deposit, the structure must be disclosed honestly to the lender:

1. Decide gift or loan before applying. Australian lenders require a gift letter or statutory declaration confirming a gifted deposit is non-repayable, and they generally want the funds genuinely saved or seasoned in the account.
2. Never sign a gift letter for money that is really a loan. A declaration stating funds are a non-repayable gift when a repayment arrangement exists is false. Signing it is fraud, can void the loan approval, and is a criminal matter — lenders do refuse applications outright when an undisclosed loan surfaces.
3. Disclose a genuine loan. It will be assessed as a liability and will reduce borrowing capacity, but the application stands on an honest footing.
4. Set a defensible interest rate and terms. See our guidance on setting a fair interest rate on a family loan.

Note that Division 7A only applies to loans from a private company to a shareholder or associate. An ordinary loan between family members is not caught by it.

What else do investors ask about CGT and family transfers?

The questions below come up constantly among people restructuring property or helping family. Each answer reflects general principles only — confirm current rates and thresholds with the ATO or a registered tax agent before acting.

Does putting my child on the title trigger CGT immediately?

Yes. Transferring a share of an investment property to a child is a part disposal. CGT is calculated on the market value of the interest transferred, not on what they paid you. Stamp duty is usually assessed on market value too, so both taxes can apply at once.

Can I avoid CGT by leaving the asset in my will instead?

Inheriting an asset does not usually trigger CGT at the date of death; the liability generally passes to the beneficiary with an inherited cost base. Special rules apply to pre-CGT assets and to a deceased person’s main residence sold within a limited period. Get estate-specific advice.

Does lending my child money create a tax bill for me?

Not on the principal. Lending cash is not a CGT event and repayments of principal are not income. Any interest you charge is assessable income you must declare. Document the arrangement in writing so it is clearly a loan rather than a disguised gift.

Where can I check the current CGT rules myself?

The Australian Taxation Office publishes the authoritative guidance on capital gains tax, discounts, exemptions and withholding. For plain-English explanations of investing and tax, ASIC’s MoneySmart is the best starting point for consumers.

What should you do before the next financial year ends?

Three things: value anything you plan to transfer, document every family arrangement in writing, and model the CGT outcome before you sign a transfer form rather than after. Timing a disposal past the 12-month mark can halve the taxable gain for individuals.

The most common failure we see is not aggressive tax planning — it is informality. Money moves between family members, titles change, and nobody writes anything down. Years later, nobody can prove whether a $120,000 transfer was a gift, a loan, or a purchase of an equity share, and the ATO, a lender, or a family court makes that call for you.

If you are helping family with cash rather than transferring an asset, put the terms in writing from day one. You can create a clear, legally structured family loan agreement with Chipkie in minutes — with repayment terms, interest and a proper record that holds up with lenders, the tax office, and your own family.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or tax advice. Australian laws and lending criteria vary by state and territory and may change. Always consult a licensed financial adviser, solicitor, or conveyancer before entering into any financial arrangement or property purchase with another party.