The Real Numbers: How Much More CGT Would You Actually Pay?

Headlines declaring that investors will pay more tax under the proposed CGT reforms aren't wrong — but they're not telling the full story either. The actual impact varies significantly depending on one variable that's received almost no attention in the coverage: inflation.

Here's what the numbers actually show.

How the Proposed Model Works

Under the indexation model proposed to take effect from 1 July 2027, your cost base is adjusted for CPI across the entire holding period before tax is calculated. In other words, you're only taxed on gains above the inflation-adjusted value of your original investment — not on the portion of your return that simply kept pace with rising prices.

That distinction matters enormously when you run the actual numbers.

The Modelling: A $1M Property Over 10 Years

We modelled the tax impact for a top marginal rate earner holding a $1 million property over 10 years at 7% annual growth — comparing the current 50% discount structure against the proposed indexation model at four different CPI scenarios.

That final figure is the one worth pausing on.

At 4.5% CPI, the proposed indexation model would actually produce a lower tax outcome than the current 50% discount structure. Not marginally lower — meaningfully lower.

For context, Australia's CPI increased 4.6% in the 12 months to March 2026.

Real PFD Transactions: What the Numbers Look Like in Practice

To ground this in reality, we also modelled two actual Property for Doctors client transactions sold in 2026 under the current rules — and then applied the proposed indexation model to those same holding periods to calculate what the difference would have been.

Those are real numbers and they're meaningful. We're not going to minimise that.

But here's the context that matters.

What CGT Reform Does — and Doesn't — Change

CGT reform changes the after-tax return on sale. It does not change the capital growth that created the gain in the first place.

The Brisbane property above doubled in value over ten years. The Adelaide property nearly doubled in under eight. The underlying investment fundamentals — the growth, the rental income, the wealth creation — those aren't touched by how the gain is taxed on exit.

For a doctor-investor with a long time horizon, the question isn't simply "will I pay more tax when I sell?" It's "does this investment still build meaningful wealth after tax?" In the cases above, even with the additional CGT liability, the answer is clearly yes.

The investors who tend to make poor decisions in environments like this are the ones reacting to a headline number without modelling their specific situation — their holding period, their cost base, the likely CPI environment across their investment horizon, and their overall portfolio strategy.

What You Should Actually Be Doing Right Now

If you hold property purchased before 1 July 2027, your existing gains are protected under the current 50% discount regardless of when you sell. There is no urgency to act.

What is worth doing is understanding how the proposed changes interact with your specific holdings — your purchase prices, your holding periods, your likely exit timeline — so that any decisions you make between now and 2027 are based on your actual numbers, not a generalised headline.

That's exactly the kind of modelling our team does with doctor-investors every day.

This article is general in nature and does not constitute financial or tax advice. Please consult a qualified adviser regarding your individual circumstances.