Should I Sell My Investment Property Before July 2027?

The core trade-off

Selling before the cliff locks in the 50% CGT discount on your entire gain. Selling after the cliff means gains accruing after 1 July 2027 are taxed under CPI indexation with a 30% minimum rate. For most investors at the 47% marginal rate, this means paying 47% on the real (inflation-adjusted) post-cliff gain — compared to 23.5% (47% × 50%) on the full gain under the current rules.

The question is not just 'how much more tax will I pay?' — it's 'is the extra tax worth the additional holding period?'

When selling before the cliff makes sense

Selling before 1 July 2027 is likely the right move if:

• You were already planning to sell in the next 2–3 years
• The property has a large unrealised gain and you're at the top marginal rate
• The post-cliff tax saving is material (typically $15,000+ for a Sydney/Melbourne property)
• You don't need the property for long-term wealth accumulation
• You can redeploy the capital into a more tax-efficient investment

When holding makes sense

Holding past the cliff may be the right move if:

• The property has strong rental yield and you don't need the capital
• You expect significant capital growth that outweighs the extra tax
• CPI indexation may actually be more favourable for your property (high inflation, long hold)
• Selling would trigger other financial consequences (loan covenants, portfolio restructuring)
• You're close to retirement and want to time the sale for a lower-income year

The numbers: a worked example

Consider a Sydney apartment purchased in 2019 for $1,085,000, now worth $1,480,000. Cost base $1,138,000. Marginal rate 47%.

Sell before cliff: Gross gain $342,000. Taxable gain $171,000 (50% discount). CGT $80,370.

Sell in 2029 (Bucket B): Pre-cliff gain ~$228,000 (50% discount applies). Post-cliff gain ~$114,000 (CPI indexation, ~3.1% p.a.). Estimated CGT ~$96,500.

Extra tax by waiting: ~$16,130. Is that worth 2 more years of rental income and potential capital growth? That depends on the property's yield and growth trajectory.

The CPI breakeven question

There is a CPI rate at which the new rules become more favourable than the 50% discount. For most properties, this breakeven is around 3–4% annual CPI. Australia's current CPI is 3.6% (March 2026). If inflation stays elevated, the new rules may not be as punishing as they appear — especially for long-term holders.

ClearGain's Scenario Modeller shows you the exact breakeven CPI rate for your property. If your expected CPI is above the breakeven, holding may be the rational choice.

What to do now

The most important thing is to calculate your specific numbers before making any decision. The CGT cliff is real, but it affects different investors very differently depending on their purchase price, current value, holding period, and marginal rate.

• Add your property to ClearGain and run the Scenario Modeller
• Review your cost base — every dollar added reduces your CGT
• Talk to a registered tax agent about your specific situation
• Don't make a rushed decision — you have until 1 July 2027

Related articles