The proposed 30% minimum tax on capital gains
A 30% minimum effective tax rate on capital gains is one component of the broader package of CGT reforms widely reported in 2026. Here is what is known about how it is designed to work.
What it is
Under the proposal, any investor with taxable income (including capital gains) above a threshold would be required to pay a minimum of 30% tax on their capital gains — even if discounts, deductions, or other tax concessions would otherwise reduce their rate below 30%.
This is targeted at high-income investors — primarily those on the top marginal rate (47% including Medicare levy) who currently benefit most from the 50% CGT discount, which effectively cuts their CGT rate to around 23.5%.
Who it would affect
The 30% minimum is primarily aimed at:
- Individual investors with high taxable incomes (likely above $180,000)
- Trust beneficiaries receiving large capital gain distributions
- Investors with significant capital gains who have used deductions to reduce their overall tax rate below 30%
How it interacts with indexation
The interaction between the minimum rate and the indexation reform is not yet fully clear. If a property is sold with a large real (above-inflation) capital gain, and the investor is a high-income earner, the 30% minimum could apply.
Practical implications
For investors considering selling:
- High-income earners may face a higher effective CGT rate than under the current 50% discount system
- Timing of sales relative to income in a given year becomes even more important
- Splitting or timing capital gains across financial years may help some investors manage below the threshold
Still unconfirmed
As of mid-2026, this proposal has been reported in the media but has not been legislated. The income threshold for application, the exact mechanism, and the interaction with other CGT rules remain subject to final policy design.