Discount or indexation — which saves more tax?

Assumes an individual investor, 32% marginal tax rate, 2.5% p.a. CPI indexation, and no prior capital losses — your real numbers may differ. Your gain is split at 1 July 2027 the way the Act’s deemed sale requires (purchase date implied by sale date minus years held): the part up to the asset’s value on that date keeps the 50% discount, and that value, indexed, is the cost base from then on. The 1 July 2027 value is estimated from this calculator’s growth assumption, because the value the Act uses is the asset’s market value on that date, which this calculator cannot know. The Act’s own transition is a deemed sale on 30 June 2027 and reacquisition on 1 July 2027, at market value or at a method the Minister may determine (sections 112-155 and 112-185; none found on the Federal Register of Legislation, checked 3 October 2026), and dates are read to the calendar month (a sale on 30 June 2027 counts as 1 June 2027). The 50% discount, which is kept on the pre-2027 slice, also applies to new residential dwellings (with a choice of indexation instead), and the affordable housing discount of up to 60% is retained — not modelled by this slider set. This is enacted law — Acts No. 49 and 50 of 2026, Royal Assent 26 June 2026 — not a Budget proposal. Indexation starts on 1 July 2027 for an asset held then (the Act treats it as reacquired that day: sections 110-36(1A) and 112-155(2)(b)); here it runs from that date on the estimated value above, not from your purchase date. Indexation is compounded annually here; real indexation uses the ATO’s published quarterly CPI index numbers, so the figure is indicative. This tool applies the 30% minimum tax in every case; by law it applies to resident individuals and not in a year the person receives the Age Pension or listed income-support payments (s 119-15), so figures for Age Pension recipients are overstated. Indicative only. Not financial advice.