CGT reform question: if property value resets at 1 July 2027, does the time period reset too?
I’m trying to understand the CGT transitional rules from the May 2026 Budget in simple terms.
Example:
I bought an investment property in 2024 for $1.1m. It was rented from day one.
I plan to move into it as my PPOR in July 2027, when it might be worth around $1.4m.
Assume I later sell it in 2040 for $4m.
My question is about the 1 July 2027 market value reset.
If the law says the property’s 1 July 2027 value is used to separate pre-2027 gains from post-2027 gains, does the time period also reset from 1 July 2027?
In other words, should the calculation be:
Bucket 1:
2024 to 1 July 2027
Investment period
$1.1m to $1.4m gain
Taxable under old rules, potentially with the 50% CGT discount
Bucket 2:
1 July 2027 to 2040
PPOR period
$1.4m to $4m gain
Potentially exempt under the main residence exemption
Or could the ATO still apply a total ownership time-apportionment formula across the whole 2024 to 2040 period, even though the value was reset at 1 July 2027?
My concern is that using a 1 July 2027 market value reset without also resetting the relevant time period seems inconsistent. For full investment properties, it could dilute post-2027 taxable gains. For a property that becomes a PPOR after 1 July 2027, it could drag post-2027 PPOR gains into tax.
Has anyone seen guidance, legislation notes, or past CGT transition examples that explain whether value resets and time periods are usually reset together?