Fact-check

Long-term ETF investor post on higher tax and planning instability

This post combines one clean policy-description claim, one forward-looking tax-comparison claim, one scope claim about shares, and one historical claim about the CGT framework. The Budget does replace the 50 per cent discount with inflation indexation plus a 30 per cent minimum tax from 1 July 2027, and the CGT redesign applies to shares as well as property. It is also correct that the 1999 reform replaced broad indexation with the discount framework for post-September-1999 assets, and that Budget 2026 now moves the system back toward indexation. But the stronger statement that well-performing long-horizon investments will almost certainly pay more tax than under the old system depends on the investor's marginal rate, inflation path, real return, and how often the 30 per cent floor binds.

3 supported 1 requires assumptions

Back to dashboard Open young ETF saver scenario

Prefills a post-2027 ETF-style savings case so the long-horizon share-investor claim can be pressure-tested against tax-rate and inflation assumptions.

Submitted text

Now the 50% CGT discount is gone and gets replaced with an inflation indexation model plus a 30% minimum tax. From everything I've read, if your investments perform well over a long time horizon, you will almost certainly pay more tax under the new system than the old one... The thing that frustrates me most is that this was sold as targeting property investors. But the CGT change hits shares just as hard. ... Howard scrapped indexation for the 50% discount in 1999 and now Labor has just flipped it back. What's to say it doesn't change again before any of us actually sell?

Per-claim verification

supported 95% confidence

Budget 2026 replaces the 50 per cent CGT discount with inflation indexation plus a 30 per cent minimum tax from 1 July 2027.

“the 50% CGT discount is gone and gets replaced with an inflation indexation model plus a 30% minimum tax.”

This is the core policy change described in the Budget text. The package removes the 50 per cent discount for future gains and replaces it with an indexation-based approach plus a 30 per cent minimum tax from 1 July 2027.

Alternative defensible framings

The post-2027 CGT redesign replaces the discount with indexation and a 30 per cent floor.

Primary sources

Budget 2026-27 Tax reform page Capital gains tax · p.1 The Government will replace the 50 per cent Capital Gains Tax discount with a discount based on inflation and introduce a minimum 30 per cent tax on gains from 1 July 2027.

requires assumptions 84% confidence

Strong long-term investment performance will almost certainly leave ETF investors paying more tax under the new regime than the old one.

“if your investments perform well over a long time horizon, you will almost certainly pay more tax under the new system than the old one.”

That can be true in many long-horizon scenarios, especially when real returns are strong and the 30 per cent floor binds or indexed gains stay large relative to the old 50 per cent discount. But 'almost certainly' is stronger than the official materials alone establish, because the result depends on the investor's marginal rate, inflation path, holding period, and the shape of real returns over time.

Assumptions required

Assumes sufficiently strong real returns relative to inflation over the holding period.
Assumes the investor's marginal rate and the 30 per cent floor produce a worse outcome than the old 50 per cent discount.
Assumes the gain is fully subject to the post-1 July 2027 regime.

Alternative defensible framings

Many strong-performance long-horizon scenarios will produce higher tax than the old discount system, but the result is not automatic in every case.
The size and even the direction of the difference still depend on inflation, real return, and tax-rate assumptions.

Primary sources

Budget 2026-27 Tax reform page Capital gains tax · p.1 The new regime combines inflation indexation with a 30 per cent minimum tax, which can produce higher tax than the old discount in many scenarios but does not itself prove that outcome for every long-horizon investor. ATO: Tax rates – Australian resident Resident tax rates 2025–26 · p.1 Different resident marginal tax rates change how the old discount and new 30 per cent floor compare in practice.

supported 91% confidence

The Budget 2026 CGT change applies to shares as well as property, not only property investors.

“the CGT change hits shares just as hard.”

The policy is not written as a property-only CGT change. The Budget text describes a broad redesign of the CGT discount while separately pairing it with housing measures, so shares and other capital assets are also within scope unless a specific carve-out applies.

Alternative defensible framings

The CGT redesign is broader than residential property and reaches shares too.
Whether shares are hit 'just as hard' as property in every scenario is separate from the basic scope point.

Primary sources

supported 90% confidence

The 1999 framework shifted broad CGT treatment away from indexation toward the discount, and Budget 2026 now shifts it back toward indexation.

“Howard scrapped indexation for the 50% discount in 1999 and now Labor has just flipped it back.”

ATO guidance confirms that indexation is only available for assets acquired before 21 September 1999, while the CGT discount applies to later eligible assets. Budget 2026 now reverses that broad architecture for future gains by replacing the discount with indexation plus a floor from 1 July 2027.

Alternative defensible framings

Australia moved from broad indexation to the discount framework in 1999, and Budget 2026 moves the system back toward indexation for future gains.

Primary sources

ATO: CGT discount How the CGT discount works · p.1 You can reduce your capital gain by 50% ... If you have owned the asset since before 21 September 1999, you can index the cost of the asset for inflation instead of using the CGT discount. Budget 2026-27 Tax reform page Capital gains tax · p.1 The Government will replace the 50 per cent Capital Gains Tax discount with a discount based on inflation and introduce a minimum 30 per cent tax on gains from 1 July 2027.