Capital gains tax on property has been a fixture of Australian tax law since 1985. For most of that period, the framework was relatively stable. More recently, reform discussions — particularly around the 50% CGT discount — have created a new layer of uncertainty for property investors. Here's what the current rules are, what's being discussed, and what Queensland property owners should think about now.
How CGT on property currently works
A CGT event is triggered when you dispose of an investment property — that is, when you sell or transfer it. The gain is calculated as: sale proceeds minus cost base (purchase price plus acquisition costs, capital improvements, and eligible selling costs). If you're an individual or trust and have held the property for more than 12 months, you apply a 50% discount to the gain before adding it to your assessable income. That discounted gain is then taxed at your marginal rate.
What changes are being discussed
The 50% CGT discount for individuals has been the subject of ongoing reform debate in Australia. Proposed changes have included reducing the discount (from 50% to 25%), removing it for certain asset types, or means-testing it. No definitive changes to the CGT discount on residential investment property have been legislated as of 2026, but the policy environment has shifted — and investors should not assume the current rules are permanent.
We're not going to speculate on what will or won't pass. The key point is that legislative uncertainty has increased, and decisions made on the assumption that the current discount is permanent carry risk.
Who is affected
The investors most exposed to CGT reform risk are:
- Long-held investment property owners with large unrealised gains
- Landlords planning to sell in the near to medium term
- Investors whose entire strategy is predicated on the current 50% discount to make the exit numbers work
If your property has been held for 10–20+ years and has experienced significant capital growth, your potential CGT liability — and therefore your sensitivity to any rule change — is substantial.
The key insight: selling triggers CGT; earning income doesn't
This is the most important structural point. A CGT event requires a disposal. Rental income — including income from co-living or rooming accommodation models — does not trigger CGT. If you hold the property and earn income from it, no CGT event occurs regardless of what the discount rate is. The CGT risk is entirely triggered by the decision to sell.
Earn from your property without triggering a CGT sale event.
See how Eleva's income model works →The compounding risk for investment property owners
Property investors currently face two simultaneous pressures: interest rate exposure (many investors are on variable rates, and rates have risen materially from historic lows) and CGT policy uncertainty. Both compound the risk of holding negatively geared investment property without an income strategy.
An investor who is subsidising holding costs each month, anticipating a capital gain exit, and now facing the possibility of a less favourable CGT treatment at that exit is carrying concentrated risk.
What Queensland property owners should think about now
Three things are worth considering regardless of where CGT reform lands:
- Model your exit tax liability under the current rules and under a reduced-discount scenario. Know the numbers.
- If you're planning to sell in the next 2–5 years, speak to your accountant about timing relative to any anticipated legislative changes.
- Consider whether an income model — one that generates yield from the existing property without triggering a sale — changes the calculus on holding. The income potential of some properties is materially underestimated.