The new ‘tax’ on SHARES coming to Australia: What it means for you if you try to sell your stocks

Anthony Albanese has confirmed a major tax overhaul that will hit Australians who make money from selling shares and other investments.

The changes, unveiled in Tuesday night’s federal budget, will scrap the long-standing 50 per cent capital gains tax discount and replace it with a new inflation-linked system from July 1, 2027.

Since 1999, Australians who sold assets such as shares and investment properties after owning them for more than 12 months only had to pay tax on 50 per cent of the profit they made.

That meant someone on the top marginal tax rate of 47 per cent effectively paid a maximum capital gains tax rate of 23.5 per cent.

But under Labor’s new system, investors will no longer automatically receive a 50 per cent discount on their profits.

For example, if an investor bought shares for $100,000 and later sold them for $200,000, but inflation meant the original investment was now worth $130,000 in today’s dollars, they would only pay tax on the $70,000 ‘real’ gain rather than the full $100,000 profit. 

The government will also introduce a minimum 30 per cent tax rate on capital gains to stop investors from selling assets in low-income years to reduce their tax bill.

Treasury examples show someone earning a typical 5 per cent annual return on a $500,000 asset over 10 years would pay about $8,075 more tax under the new system compared to the current 50 per cent discount.

But investors earning very strong returns would be hit much harder. 

Treasury said someone earning a 7.5 per cent annual return on the same investment over 10 years would pay an extra $58,851 in tax.

By contrast, investors whose returns barely outpace inflation could end up paying less tax than they do now because the inflation adjustment wipes out much of the taxable gain.

One Treasury example showed an investor paying nearly $25,000 less tax under the new rules because their investment only matched inflation.

Australians who borrow money to invest in shares will still be able to claim negative gearing tax deductions. 

The capital gains tax changes will also hit property investors, with the budget unveiling a sweeping package of tax reforms targeting landlords and other investors.

Under Labor’s changes, negative gearing will no longer be available for Australians who buy established investment properties from mid-2027.

Instead, investors will only be able to claim negative gearing tax deductions on newly built homes, in a move aimed at boosting housing supply.

The government said existing investment properties owned before the changes take effect will be grandfathered, meaning current landlords can continue claiming negative gearing under the old rules.

Wealthy families using trusts will also be targeted, with the government introducing a new 30 per cent minimum tax on discretionary trusts, which are commonly used to split income among family members and reduce tax bills.