Every business gets a tax value on 1 July 2027, whether it is sold or not

The capital gains tax changes are law. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 passed both houses of Parliament on 25 June 2026 and applies to gains that accrue from 1 July 2027.

The headline was the end of the 50 per cent discount. The part that reaches every business owner, including the ones with no intention of selling, is quieter. It is a date and a number.

What happens on the date

The law treats an asset you hold on 30 June 2027 as sold just before 1 July and bought back at its market value. Nobody pays tax that day. It is a way of drawing a line.

Growth up to the line keeps today's treatment, including the 50 per cent discount where it applies, and is only taxed when you really sell. Growth after the line falls under the new rules: the cost base is indexed for inflation and a 30 per cent minimum tax applies to the real gain.

Treasury's explainer puts it this way: the rules are "entirely prospective", and business value built up before the date "keeps the old 50 per cent discount rule, no matter when you sell in the future".

So a sale in 2031 is taxed in two parts, and the figure at 1 July 2027 decides how much sits in each.

Be precise about who it reaches. The rule applies to assets held by individuals and by trusts. A company's own assets are not revalued. What is revalued is the thing a person or a trust holds: the shares in the company that runs the business, the units in a unit trust, or the goodwill and premises where those are held directly or through a family trust. Either way the owner ends up needing a market value for their interest in the business. Which of your assets it reaches is your accountant's question.

How the number is set

Two ways, and the choice is not as open as the announcement suggested.

Market value. This is the default. For listed shares it is a price on a screen. For a private business there is no screen, so it means a valuation.

A formula. The Act lets the Treasurer set an apportioning method as the alternative, which in effect spreads the total gain across the time the asset was held. The National Tax and Accountants' Association noted in September that the instrument had not been registered, and that as drafted it was limited to real property and to assets with no readily ascertainable market value. Have your accountant check its final form before relying on it.

The same association made the practical point about timing. The value has to be the value at the date, so it can only be worked out afterwards. A figure prepared early is a forecast. One prepared years later is harder to defend.

Both sides of it

The Government's case. The Treasurer said the Act "fixes a big distortion that was created in our economy over 25 years ago". Treasury's position is that owners are protected twice: past gains keep the old treatment, and all four small business concessions stay, with the turnover threshold for the 50 per cent active asset reduction rising from $2 million to $10 million from 1 July 2027.

The case against. The Opposition called the deal that passed it a "dirty deal", and Senator Slade Brockman called the changes "a retrograde step". The accounting bodies warned of considerable complexity for practitioners and their clients, and the valuation question is a fair example: a rule that turns on a market value needs somebody to produce one.

The repeal promise. The Shadow Treasurer, Tim Wilson, told Sky News on 13 May 2026: "We're going to oppose them. We will repeal them." Take that for what it is. A repeal needs an election to be won and a Parliament to pass it, and neither is due before 1 July 2027. An owner cannot plan a sale on a promise. The date and the number arrive either way.

Where a broker fits, and where one does not

I will not value your business for tax, and you should be wary of any broker who offers to. I am not a registered valuer or a tax agent.

What I can tell you is what a valuer will ask for, because it is the same file a buyer asks for:

• Three years of accounts that tie back to lodged returns.
• Earnings with the owner's costs taken out, and a document behind every adjustment. The add backs that survive are the ones with paper.
• Contracts, renewals and customer concentration.
• The lease, the plant list and the licences.

A business that has that file in order in July 2027 gives a valuer something to work from. One that does not pays somebody to reconstruct it, or falls back on the formula whether or not the formula suits.

What to do between now and then

• Ask your accountant which of your assets this reaches, and whether market value or the formula is the likely route for each.
• Keep FY26 and FY27 clean. Those are the years a valuer at July 2027 will lean on.
• Put July 2027 in the diary for the valuation itself, if a valuation is the answer. Not before the date, and not long after it.
• Keep everything. The figure, the workings and the evidence will be asked for in the year you sell, which may be ten years on.

You do not need to sell before the date to keep the old treatment on what you have built so far. As the association put it, the law does that for you. The reasons to sell or to wait are the same ones they always were, and the rest of the change is set out in the earlier piece on the 2027 rules.