On August 4, 2026, the Treasury issued a draft legislative proposal detailing the “apportioning method” for capital gains tax (CGT) calculations. This approach, a formula-based substitute for market valuation, was introduced under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.
Titled the Income Tax Assessment (Method for Apportioning Capital Gains and Capital Losses) Determination 2026, this draft applies to real estate and assets lacking a clear market value.
Key Features of the Apportioning Method
This method is applicable only upon the actual sale of an asset, not beforehand. It determines a hypothetical value as of July 1, 2027, by reversing from the final sale price, utilizing a consistent compounded growth rate over the entire ownership period.
Public consultation on the draft ends on August 21, 2026, and it has not yet been enacted into law. The designated dates of July 1, 2027, for deemed disposal and reacquisition, and June 30, 2027, for asset scope reference, remain unaltered.
Limitations of the Apportioning Method
The method presumes a steady, linear growth rate throughout the asset’s ownership. However, property values often fluctuate unpredictably, and the formula may result in a higher or lower taxable gain, depending on the actual growth pattern.
Since the calculation can only be performed post-sale, it offers no immediate clarity for property owners as of July 1, 2027. Instead, it provides retrospective certainty, potentially years later, relying on evidence that may become more challenging to obtain and verify over time.
The uncertainty is most pronounced for diverse property portfolios, commercial and rural properties, and assets within detailed structures, where a uniform growth rate is least reflective of actual performance.
A market valuation conducted on July 1, 2027, by a qualified professional using current data and a robust methodology, remains the most accurate means of determining an asset’s value. It reflects the property’s actual state at that time, rather than relying on growth assumptions.
Companies like Acumentis are accepting advance bookings for valuations, enabling property owners to prepare for the July 1, 2027, transition. A 20% deposit guarantees a valuation appointment and current pricing, ensuring priority access to a local market expert.
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