CGT reform: market valuation rules for assets held before 1 July 2027

Category: Tax & CGT | Source: Australian Taxation Office, published 19 October 2026

On 26 June 2026, Federal Parliament passed the first tranche of capital gains tax (CGT) reform legislation. The ATO has published new CGT reform guidance and will release further products and tools in stages as more legislation is developed and enacted.

Deemed disposal and reacquisition at 1 July 2027

Taxpayers holding CGT assets before 1 July 2027 may have those assets treated as disposed of immediately before 1 July 2027 and reacquired on 1 July 2027. Capital gains and losses are then calculated as if there were two separate ownership periods.

The market value immediately before 1 July 2027 is used as the capital proceeds for the deemed disposal, and as the first element of the cost base for the period after 1 July 2027. Any gain or loss from the deemed disposal is deferred and only reported when the asset is actually disposed of or another CGT event happens.

Don't get a valuation yet

Clients do not need a valuation in place on 1 July 2027, and the ATO says they shouldn't obtain one before that date, because a valuation can't be forward-looking. The Government is also developing an alternative, the apportionment method, and the ATO will issue guidance once it is enacted.

Existing market valuation guidance

The ATO's existing guidance on market valuations for tax purposes sets out its expectations, the evidence needed to support a valuation, and what it considers when assessing a valuation's accuracy.

What's coming

The ATO plans further tools and guidance, including how to determine market value for certain types of assets, which professionals to consider when seeking a valuation, and the documentation and records required.

What clients can do now

• Identify potentially affected assets. Review CGT assets likely to be held across 1 July 2027, including assets that may be difficult to value retrospectively.
• Strengthen the records. Retain acquisition documents, cost base records, improvement costs, ownership information and evidence relevant to the asset's condition and circumstances.
• Avoid premature valuation work. Do not commission a valuation that purports to determine the value immediately before 1 July 2027 before that date.
• Plan the valuation process. Consider which assets may need specialist valuation input after 30 June 2027 and what supporting material should be preserved.
• Watch for further guidance. The apportionment method and additional ATO products are still under development, so the preferred calculation approach may not yet be settled.

Practical takeaway: The immediate priority is asset identification and record preservation, not obtaining an early valuation. The valuation, or a permitted alternative method, can be addressed once the relevant date has passed and the outstanding rules and guidance are available.

Read the full ATO update: CGT reform – guidance and market valuations

Need help preparing your clients for the CGT reforms? Contact LeaderTech.

This article is general information only and does not take into account your circumstances. It is not endorsed by the ATO.